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November 13, 2013

Plain Dealer: Nonprofit CEOs with Excessive Pay are Minority

Dr. Robert Fischer

A Cleveland Plain Dealer article, "Nonprofit CEOs with excessive pay are in the minority, national research group says," quotes Dr. Rob Fischer, Co-Director of the Center on Urban Poverty and Community Development and Director of the Master of Nonprofit Organizations Program at the Jack, Joseph and Morton Mandel School of Applied Social Sciences. The study by Charity Navigator on CEO Charity Compensation examines nearly 4,000 non-profits across the US, focusing on the largest nonprofits, and their CEO's compensation, which is available through the charity's Federal Form 990 reports for the previous years.

The article discussed a recent study of nonprofit CEO compensation and addresses donors' perceptions of the salaries of charity CEOs. Dr. Fischer points out that the study data and median conclusions are skewed by focusing on the largest charities, and also that "about 40 percent of nonprofit CEOs serve in organizations with budgets under $1 million and some aren't paid at all. He noted that "The compensation of a nonprofit CEO is set by a board of directors who looks at the expertise and capabilities that are needed to run the organization and make that [salary] decision....There may be a public perception that nonprofit CEOs are richly compensation but by and large that's not the case....The social mission of nonprofits often requires the highest levels of leader skills and performance. Many of these CEOs, who to some have outsized salaries, have the business credentials to earn more in the for-profit sector but they truly believe in what they're doing."

The Center on Urban Poverty and Community Development is a research center at the Jack, Joseph and Morton Mandel School of Applied Social Sciences, a graduate school of social work at Case Western Reserve University.