Salary Survey Distorts Nonprofit Pay Picture

To the Editor:

Implicit in your article on The Chronicle’s annual survey of compensation (“CEO Pay Grew Last Year, but a Slowdown Expected,” October 1) was a sense of surprise that the median increases were so high and the number who took reductions so low.

My own response is that such surveys distort the real discussion about nonprofit salaries in general, and about the salaries of CEO’s at the overwhelming number of nonprofits, most of whom can only dream about the budget challenges of these large organizations and foundations. Boards of directors, or the executive directors themselves of the many thousands of smaller nonprofits, by far the majority, may feel that they need to follow the lead of the “big boys” and reduce staff salaries as well. After all, in times like these, with stretched and fragile budgets, isn’t it appropriate to show fiscal discipline by demonstrating that they too are setting the right example?

But there is a vast difference between a CEO making $500,000 each year and one making $75,000. It isn’t for me to arbitrate what a living wage for CEO’s should be, but realistically a 10-percent cut in a $500,000 salary affects lifestyle, while a 10-percent cut in a $75,000 salary can affect viability.

What is more, salaries below the top executive level are, by definition, lower. In so many not-for-profit organizations, the salaries of those on the front lines are already at a very fragile level, and too often the benefits are token at best. If we put pressure on the salary of the top executives, how will we maintain the pay levels of those whose salaries are but a fraction of their bosses’?

It is fair to acknowledge that numerous senior executives have volunteered to reduce their own salaries in order to preserve positions or forgo salary reductions among their staff members. Such leaders are to be praised and applauded. But, in my experience, with salary lines being the largest line in many nonprofit budgets, there is great pressure to balance budgets on the backs of overworked and underpaid staff. It is a hard and delicate issue.

But when one looks at the salaries of only the largest of their kind, as The Chronicle did, it inadvertently allows too many to overlook the real and continuing challenge to the voluntary sector — enabling those providing their services to do so at a living wage, with dignity and pride. Most nonprofit executives are not overpaid; most of their staffs are underpaid. Even — or especially — in these economic times, let’s not forget that.

Richard Marker
Assistant Professor
Center for Philanthropy
New York University

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To the Editor:

By limiting your study to the largest nonprofit organizations, The Chronicle gives a very unrepresentative picture of executive compensation in the nonprofit sector.

The Chronicle of Philanthropy should complement this article by also reporting on the CEO salary levels of the rest of the sector. Many of the people doing the most critically important work earn embarrassingly low wages.

The ethical challenge for me is, Why the huge disparity? The answer is simple: It is market-driven. Those with easy access to financial assets are paid accordingly. The salary does not define the value of what work is most important to the good of society and to the quality of life in our communities.

We seem to have developed a double standard in the United States concerning compensation. If you work for stockholders, you should be paid at the highest possible level. If you work for donors, you should not expect as much.

After all, if the donor sacrificed by giving, should the nonprofit staff not also sacrifice?

This is faulty logic. I fear that The Chronicle‘s limited focus on the high-end nonprofit leaders will hide the actual reality of modest, and even inadequate, salaries in the majority of nonprofits.

Many of these organizations need the best and the brightest to deal with complex problems that must be solved for the good of our society and its people. And these individuals should be compensated at levels that reflect the quality and importance of their work.

Tom Harvey
Director, Master of Nonprofit Administration Program
Mendoza College of Business
University of Notre Dame
South Bend, Ind.