Pay Gap Narrows for Male and Female Nonprofit Executives, Study Finds

Female executives of nonprofit organizations earned less than their male counterparts last year,

a new study has found, but the gap in pay has closed significantly in the past five years.

The median compensation of male chief executives in 2005 was 25.6-percent higher than the pay for females in similar positions, according to the study by GuideStar, an organization that collects the information nonprofit groups report to the Internal Revenue Service about their finances and activities. However, that difference is far less than it was in 2000, when the pay gap between male and female executives was 45.7 percent.

Part of the reason for the difference in pay is that female chief executives are more likely to be found at smaller organizations. Women accounted for 57 percent of the top executives at nonprofit groups with budgets of $1-million or less, but just 36 percent of larger organizations.

The report also found that leaders of the largest nonprofit organizations received larger percentage pay raises than those at smaller groups.

The median increase in compensation for chief executives at organizations with budgets between $500,000 and $1-million was 3.7 percent, compared with 6.8 percent for those at groups with budgets greater than $50-million. The median shows the point at which half of the increases were smaller and half were bigger.

Budget Size

At organizations of almost every size, however, salaries of female CEO’s grew faster than those of men.

At the largest nonprofit organizations (those with budgets greater than $50-million), women who held the same position as they had the previous year saw their compensation jump by 8.5 percent, compared with 6.7 percent for men.

At the opposite budget extreme, the median increase in compensation for female chief executives at groups with budgets of $250,000 or less rose by 3 percent, while for men it grew by just 1.9 percent.

Overall, women held 44 percent of the CEO positions, but received only 33 percent of the total compensation.

Gender disparities existed not only in chief executives’ salaries, but also in those paid to many other nonprofit workers at organizations of all sizes, the study found.

With few exceptions, men who held the top financial, development, educational, and program positions were paid more than women in those same posts at other organizations of similar size.

Even at the smallest charities — with budgets of $250,000 or less — where female employees outnumbered male employees in most positions, women still earned less.

Women were twice as likely to hold the top financial job at those small organizations, for example, but their median pay was only about three-fourths of what men were paid. In 2004 female chief financial officers earned a median of $26,500, compared with $35,773 for men in the same spot that year.

Differences by Mission

The report also includes information on compensation at different kinds of charities, as well as compensation by geographic location.

Nonprofit groups that focus on areas that require specialized or technical knowledge, like health care, medical research, and scientific research, tended to pay their executives the most.

Pay at human-service, religious, and arts charities tended to rank near the bottom of the scale.

The highest median pay for all officials was at science and technology research institutes, at $119,562. The lowest median compensation went to those at organizations working on youth issues, at $70,522.

Salaries also varied greatly depending on a nonprofit organization’s size.

Chief executive officers at arts groups with budgets between $1-million and $5-million, for example, earned a median of $90,500, less than half the $192,512 median for their counterparts at arts organizations with budgets greater than $5-million.

Among 20 metropolitan areas studied in the report, median pay for all officers in Washington was the highest, at $107,758. The lowest compensation was in the Riverside-San Bernardino, Calif., metropolitan area, at $77,395.

After adjusting for differences in the cost of living, however, GuideStar found that executives in Houston ended up with the most disposable income, equal to 26 percent more than CEO’s in Washington.

Those in San Francisco had the least left after accounting for living costs, equal to slightly more than half of what chief executives in Washington ended up with.

The 2006 GuideStar Nonprofit Compensation Report is based on an analysis of federal tax returns filed by more than 63,000 nonprofit groups. GuideStar, in Williamsburg, Va., is a nonprofit organization that makes data about nonprofit groups available to the public.

Electronic copies of the report cost $349, while CD-ROM versions cost $449. They can be obtained from the GuideStar Web site or by calling the organization at (800) 784-9378.