Monday, January 18, 2010

Addressing Nonprofit Executive Compensation

What could be worse than seeing a headline announcing the names of overpaid nonprofit executives with your organization’s name among the list?

The best way to avoid this (or address this if it should happen) is to have clearly defined processes in place as you determine executive compensation. The data from the process could be helpful in addressing the situation and is also helpful as you complete the 990 Form.

A suggested process is to benchmark your chief executive’s compensation against survey data for comparable organizations. The information is available from multiple resources such as: the Minnesota Council on Nonprofits survey, GuideStar and the Chronicle of Philanthropy. There may be other resources or procedures that are used in determining appropriate levels of compensation for your staff as well. Feel free to share your processes and/or resources by responding to this post.

Kathy Grochow, NRS, St. Cloud

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