Ask Dave Taylor: Tech and Business


How much should executive directors be paid?

I've talked before about the Board Café's informative newsletter for non-profit Boards of Directors, particularly in the article entitled Non-Profit Board Self-Assessment Survey. The latest article on Executive Director pay is another keeper, particularly given the scandals surrounding the often incredibly inflated salaries of even the most benign non-profits. Indeed, before you donate to your favorite charity, exec director pay is an interesting figure to learn... And do pay attention: this article also talks about a shocking gender gap in the pay of executive directors too.


Both the Internet and new regulations in some states are making nonprofit boards more aware than ever about executive compensation. On the web at,
all the Forms 990 for US nonprofits (with annual revenues of $25,000 or more) are posted and each shows the salaries for "key employees" who are paid $50,000 per year or more. In other words-by going to this website anyone can find out the salary of the top staff in nearly any nonprofit.

At the same time, the media is filled with stories of executives-in both for-profit and nonprofit corporations-with excessive compensation. Many CEOS at many large corporations make $10 million per year or more-often 400 times the salary of a blue collar worker at the same company (Business Week, Stanford Report), raising eyebrows among employees and shareholders. The salaries of some nonprofit execs-with a median of $75,000 for organizations with annual budgets of between $1 million and $2.5 million-are also legal but raise eyebrows in different circles. In California, nonprofits with non-governmental income of $2 million or more are now required to have the board approve the salaries of the CEO/executive director as well as that of the CFO.

Despite the press about excessive compensation, nonprofit boards are more frequently worried that they are paying their executives too little. In a national study of nonprofit executive directors, most were...