Raises for Female Executives Match Those for Men, but Pay Gap Persists

Female executives at nonprofit groups are winning raises equivalent to those their male counterparts receive — but the salary gap remains wide, according to a study released last week.

GuideStar’s eighth annual compensation report, analyzed data from 2006 tax filings for more than 58,000 charitable groups.

It found that the median increases for female chief executive officers slightly outpaced those for men at organizations of most sizes.

For instance, at organizations with budgets greater than $50-million, the median pay increase for female CEO’s was 7.4 percent, compared with 7.2 percent for male CEO’s.

“When we first started doing the report, it used to be the other way around,” says Chuck McLean, vice president for research at GuideStar. “I consider it to be pretty slight, but it is evidence that women are starting to make up some of the difference in salaries.”

That was one of the few bright spots in the report for women, however. The report found that compensation of women continues to lag behind that of men. At the biggest organizations, female CEO’s earned 34.8 percent less than their male counterparts.

GuideStar, which collects Form 990 tax filings of nonprofit organizations, studied data on more than 84,000 positions, including jobs in human resources, marketing, public relations, and technology.

The study found that:

• Women held 46 percent of the positions examined, an increase of 5 percentage points over 2005, but they received just 35 percent of the total compensation.
• Women held 55 percent of the CEO positions at organizations with budgets of $1-million or less, but only 36 percent at organizations with budgets greater than $1-million. Both percentages were slightly up from the previous year.
• The percentage of female executives has increased from 2002 to 2006 at nonprofit groups of most sizes. But in the CEO position, women gained ground in the smallest organizations and lost ground in many of the largest ones. “In the larger organizations, it’s still a man’s world,” said Mr. McLean, “just like in the large publicly traded companies.”
• Compensation for female CEO’s lagged behind that of their male counterparts at smaller organizations as well. The difference was 12.7 percent, for example, at organizations with budgets between $250,000 and $500,000.

Retirements Expected

Mr. McLean explained some of the disparities by noting that female executives are still more likely to head human-service organizations, as opposed to the higher-paying science- and health-related organizations. But he said many CEO’s at those large, big-budget organizations are baby boomers in their 50s and 60s, not far from retirement age.

“More and more of those men will be replaced by women in the future,” Mr. McLean said. “It will be interesting to see what happens with those salaries.”

The study also found a persistently wide gap between the pay of CEO’s at smaller charities and those at the largest. The top executives at organizations with budgets of $250,000 or less earned a median salary of $39,233; those at organizations with budgets of $50-million or more earned a median salary of $360,266, more than nine times as much.

The disparities could also be seen in the size of pay increases. The median increase for CEO’s at organizations with budgets of $250,000 or less was 2.8 percent. The median increase for those at organizations with budgets greater than $50-million was 7.6 percent.

Research Tops List

The study also tracked compensation levels by type of charity and for 20 large metropolitan areas.

It found that large organizations or charities associated with specialized knowledge reported the highest compensation, while those dealing with human services, religion, and nutrition ranked among the lowest paying.

Science and technology research institutes, for instance, posted a median pay of $120,208.

Organizations dealing with general and rehabilitative health posted the next-highest median pay, $111,484. At the other end of the spectrum, religious charities paid a median of $57,247, while those focused on food, agriculture, and nutrition paid $63,237.

The study found that Washington, D.C., had the highest overall median compensation, at $113,298.

This marks the third consecutive year the nation’s capital has posted the highest pay.

The study noted that this isn’t surprising, given the large number of national organizations with headquarters in the city. Riverside-San Bernardino, Calif., had the lowest pay of the cities studied, with a median compensation of $72,443.

But when adjusted for the cost of living, the study found that nonprofit executives in San Francisco had the lowest buying power. Those in Houston had the highest.

Electronic copies of the report can be downloaded at a cost of $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.