How Much Less Do Nonprofit CEOs Get Paid Than For-Profit CEOs?

The average nonprofit CEO makes about $120,000 a year.

How Much Less Do Nonprofit CEOs Get Paid Than For-Profit CEOs?

Nonprofit CEOs may play an invaluable role in changing the world, but they still make less than their for-profit counterparts. The average nonprofit CEO makes a little more than $120,000 a year, according to the 2016 Charity CEO Compensation Study by Charity Navigator.

The exact figure is $123,362, taken from an analysis of tax filings by 4,587 charities within their database. (That’s a median amount; mean-based averages aren’t reliable for salary estimations because they can be skewed by extremely high or low numbers.) It doesn’t account for traditionally small, cash-strapped organizations or emerging startups. As the fine print states, only groups consistently reporting a half-million dollars in public support and more than $1 million in revenue were included.

While not quite apples-to-apples, that means established nonprofit leaders are making at least 25% less than the wide swath of CEOs in the for-profit world, according to a PayScale report. That amount rose just 3% year-over-year.

It’s hard to argue that anyone with a six-figure salary is underpaid. Still, not all philanthropic disciplines earn equally. In general, the heads of research, education, and rights groups made far more than those in human services and community-based efforts. Those in the Northeast and mid-Atlantic regions made far more than people in other parts of the country, which Charity Navigator posits may have to do with the cost of living and competition within some areas.

Pay was highest in Washington D.C., followed by New York, then Los Angeles. You can find a breakdown of 30 major metros here.

Not surprisingly, it appears that CEO compensation goes up relative to the size of the group–at least in terms of what annual expenses must be managed. There is, however, one statistic that’s unlikely to be replicated in corporate America: As those expenses increase, the percentage of budget allocated toward the leader’s salary actually decreases. In other words, with seemingly more financial responsibility comes more money—but not at the expense of hurting the organization.

Those curious about what leaders are making by cause and state can learn more using Charity Navigator’s Sector Analyzer tool. Just don’t equate low pay with good budgeting or management. As the study explains in a bold-printed warning: “Consider the performance of the charity in relation to the CEO’s pay.” If good talent pays you back, it’s often worth the investment. A cheaper failure could cost your group a lot more than one salary.

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