More Chief Executives Took Pay Cuts Than Other Senior Staff Members at New York City Charities, Study Finds

At nonprofit groups in the New York metropolitan area, more chief executive officers than other senior staff members took pay cuts in the 2010 fiscal year, according to a new survey of compensation trends by the Nonprofit Coordinating Committee of New York. However, austerity wasn’t universal for top leaders, and signs point to bigger paychecks ahead for more of them in 2011.

Thirty-one percent of organizations reported a pay increase to their top executives in 2010 compared with the previous fiscal year, and 42 percent expected another increase next year.

Of the nonprofit leaders who received a pay increase for the 2010 fiscal year, 66 percent received raises equal to 1 to 9 percent of salary, while another 21.5 percent got pay hikes of 10 to 20 percent.

Ten percent of organizations said their top executives had accepted a pay cut in 2010. Those chief executives relinquished up to 20 percent of their previous year’s salary. However, only 1 percent of nonprofits anticipated a cut for top executives in the coming fiscal year, while 35 percent expected CEO pay to stay flat.

Meanwhile, compared with their bosses, fewer deputy directors and chief operating officers (5 percent), chief financial officers (8 percent), and top fund-raising officers (5 percent) received pay cuts in 2010. Salary cuts for those jobs tended to be less than 10 percent.

‘Badge of Courage’

Michael Clark, the committee’s president, said he suspected the reason so many chief executives took cuts was that “it has been a little bit of a badge of courage for executive directors to say, ‘I’ll just keep my salary constant or take a cut’,” while protecting subordinate staff members.

He noted that many New York charities adopted across-the-board cost-savings measures such as short-term furloughs or staffwide salary freezes, especially if doing so allowed them to avoid layoffs during the economic downturn.

The Nonprofit Coordinating Committee of New York surveyed nearly 1,500 of its member organizations in April and received 470 responses. Those that provided data ranged widely in size, with annual operating budgets of under $100,000 to $90-million, and in mission, though 37 percent of groups that responded are health or human-service charities.

• Among nonprofits focused on advocacy, civil rights and liberties, community development, and other similar missions (so-called public-societal benefit groups) or education, nearly 9 percent of top executives in each field took a cut in pay; 8 percent of top executives in arts and cultural organizations took a cut. Among health and human-services charities, 6 percent of top executives took a cut.
• In all types of organizations except membership associations and religious groups, significantly more of the them expect pay increases for their chief executives in the 2011 fiscal year, compared with the percentage that did receive raises in 2010. For example, while 36 percent of leaders at international or foreign-affairs groups received a salary bump this year, almost 65 percent expect to see a pay raise next year.
• Thirty-eight percent of deputy directors got a raise in 2010, as did 35 percent of chief financial officers and 33 percent of top fund-raising officers. Most of the increases were less than 10 percent, and most organizations said people in those job categories would get similar raises in the next fiscal year.

Full survey results are available only to members of the Nonprofit Coordinating Committee of New York.