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The Nonprofit Industry Has A Big Wage Gap Problem

Not to mention the fact that in an industry that is 70% female, fewer than 45% of CEO positions are occupied by women.

The Nonprofit Industry Has A Big Wage Gap Problem
Photo: Breather via Unsplash

Female CEOs in the nonprofit world are still being paid less than their male counterparts. In fact, the bigger the organization, the bigger that pay gap. While women leaders make roughly 8% less than male leaders at groups with a budget of $250,000 or less, the disparity widens to 25% for groups at the $25 million or higher level, according to a recent GuideStar report. Nationally, women within the private sector generally make an average of 20% less than their male counterparts, according to the Institute for Women’s Policy Research.

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GuideStar CEO Jacob Harold has a term for that. “It could be called hypocrisy,” he says, noting that many of these groups already tout gender equity as a facet of their broader social missions. Nonprofits, which account for about 10% of country’s entire workforce, also tend to have a higher number of female employees.

It gets worse: A comprehensive industry report from 2009 shows that while the field is over 70% female, fewer than 45% of CEO positions are occupied by women. GuideStar has found that women occupy less than a third of the corner offices within the industry’s most well-funded groups, that 15% or so of the sector where budgets go north of $10 million. The result means the industry isn’t just suffering from radical pay disparities; there could well be promotions that are going overlooked.

Photo: Breather via Unsplash

The 2016 GuideStar Nonprofit Compensation Report was built on an analysis of more than 96,000 IRS form 990s submitted by tax-exempt organizations. They also analyzed trends in other common positions within each organization, which while hard to generalize, likely share some of the same troubling income issues.

The group’s data shows both that gender-based pay gaps within the industry have continued to decrease over the last few years, while more women are being promoted top spots, albeit slowly. “We’ve seem some slight progress, but it’s been quite inconsistent,” Harold adds.

The goal of the report isn’t to chastise nonprofits (though they should be chastised), so much as make them aware of the problem. It’s also helpful as an index of what a fair level of compensation should be for different employees across different organizations in various regions.

One factor that data can’t help with, however, is recognizing other types of discrimination based on variables that aren’t shown on a 990. There aren’t form-related boxes to check, for instance, for leader’s race or sexual orientation. In late 2014, GuideStar has started its own program for collecting voluntarily submitted diversity data, which may help them draw larger conclusions about inclusivity over time.

In the end, much of the problem may have to do with how companies are thinking about hiring in the first place. “You see discrimination in all sorts of really subtle ways,” Harold says, noting that employers who calculate hiring salaries based on the previous earnings of applicants instead of the fairest pay for the job often shortchanges women who were unfairly paid in previous positions. “Some of these discrepancies replicate themselves. That’s part of what we are seeing here–and that is what can be so insidious about it.”

About the author

Ben Paynter is a senior writer at Fast Company covering social impact, the future of philanthropy, and innovative food companies. His work has appeared in Wired, Bloomberg Businessweek, and the New York Times, among other places.

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