New GuideStar Nonprofit Compensation Report Reveals Struggling Economy Continued to Affect Nonprofit CEO Compensation in FY 2010
Median Compensation of Females Also Continued to Lag Behind That of Males
Washington, D.C.—September 13, 2012—GuideStar—the leading source of nonprofit information—today published its 2012 GuideStar Nonprofit Compensation Report, the only large-scale analysis of its kind that relies exclusively on data reported to the IRS. Between 2009 and 2010, increases for incumbent CEO compensation started to creep back up at larger organizations, though still below levels seen before the economic meltdown. At organizations with expenses of $1 million or less, compensation increases were lower than during the period between 2008 and 2009. In total, the compensation of 41 percent of incumbent CEOs remained static or declined. Program areas that had higher median CEO compensation were science and technology research institutes and health, while the median compensation for animal- and religion-related programs tended to be lower.
“Our report tells us that the effect on executive compensation of the downturn in the economy lasted into 2010,” said Chuck McLean, GuideStar's vice president of research and the author of the report. “Between 2008 and 2010, we saw long established compensation patterns turned upside down.”
The 2012 GuideStar Nonprofit Compensation Report analyzes key employee compensation across the entire GuideStar database of digitized IRS Form 990 information for 501(c) organizations. Derived from data reported to the IRS by more than 77,000 organizations from the entire 501(c) universe for fiscal year 2010, the report includes statistical compensation analysis for fourteen executive-level job categories by gender, budget size, program area, and geography, as well as comparisons of year-over-year compensation increases for incumbent executives. Among the report’s highlights:
- The economy had a definite effect on compensation. In 2008, median increases in incumbent CEO compensation were generally 4 percent or higher. In 2010, increases were below this level for the second consecutive year.
- Median compensation of females continued to lag behind that of males when considering comparable positions at similar organizations. The gap ranged from 10.4 percent for CEOs at organizations with budgets of $250 thousand-$500 thousand to 24.8 percent at organizations with budgets of more than $50 million. Since 2000, though, these gaps narrowed for most sizes of organizations. Organizations in the $1 million-$10 million range, where the gap actually increased, were the notable exception.
- Since 2000, the percentage of female CEOs increased for organizations of all sizes. The majority of organizations with budgets of $1 million or less had women as CEOs, although the percentage of female CEOs decreased as budget size increased. Only 17 percent of organizations with budgets of more than $50 million had female CEOs.
- As usual, health and science organizations had the highest overall median salaries. Food, religion, and animal-related organizations brought up the rear.
- For the seventh straight year, Washington, D.C., had the highest overall median salary of the top 20 metropolitan statistical areas (MSA). Denver-Boulder, Colo., had the lowest. Adjusted for cost of living, New York was the MSA where nonprofit executives had the lowest median buying power, whereas those in St. Louis had the highest.
The Pension Protection Act of 2006 increased the penalties for excessive benefit transactions, including overpayment of nonprofit executives. Accurate, complete, and authoritative information on the nonprofit sector is more important than ever, and the GuideStar Nonprofit Compensation Report is a comprehensive resource to help nonprofits ensure compliance with IRS regulations on executive compensation.
"Nonprofits are tasked with documenting their compensation practices for oversight agencies, grantmakers, and individual donors," added McLean. "Our annual compensation report provides important information to help nonprofits explain to stakeholders that their compensation practices are appropriate."
To view sample pages or purchase the 2012 GuideStar Nonprofit Compensation Report, please visit http://www.guidestar.org/rxg/products/nonprofit-compensation-solutions/guidestar-nonprofit-compensation-report.aspx. Members of the media may request a complimentary copy at email@example.com.
To learn more about nonprofit compensation and the 2012 GuideStar Nonprofit Compensation Report, register for our upcoming Webinar, “Best Practices in Nonprofit Compensation” on September 27, 2012, at 1 pm ET. This is the 12th year that GuideStar has conducted its annual compensation research. To find a list of compensation-related articles spanning 2002-2010, please visit http://www2.guidestar.org/rxg/news/articles/compensation-articles.aspx.
Lindsay J.K. Nichols
GuideStar, www.guidestar.org, connects people and organizations with information on the programs and finances of more than 1.8 million IRS-recognized nonprofits. GuideStar serves a wide audience inside and outside the nonprofit sector, including individual donors, nonprofit leaders, grantmakers, government officials, academic researchers, and the media.