The average salary for the chief executive officer of a large charity in America increased last year, with education-related charities seeing the biggest boosts and religious charities seeing the smallest, according to a new study by Charity Navigator.
On average, the salary for an education charity CEO was $272,645 (an increase of 5.9 percent from 2008) while the salary for a religious charity CEO was $90,000 (1 percent more than the year before).
The average salaries of charity CEOs from other categories fell in between, though only religious charity CEOs had an average salary less than $100,000 and a salary increase of less than 4 percent.
For its study, Charity Navigator examined CEO compensation at 3,005 mid- to large-size charities in America. CEO pay includes salary, cash bonuses and expense accounts, but not contributions to benefit plans or deferred compensation that is allocated to be paid in later years. The data for the report was gathered from the charities’ annual informational tax filing for the fiscal year ending 2008.
“Relatively high CEO compensation is one of the key factors that will cause a donor not to support a charity,” remarked Charity Navigator President and CEO Ken Berger, whose charity evaluating organization is America’s largest and most utilized.
“That is especially true now, given the recession’s impact on many donors’ own paychecks,” he added. “Donors want to know that their charitable donations will go as far as possible to support the charity’s good works, rather than pad a CEO’s wallet.”
To keep extreme salaries from skewing the data, only the median, or middle, value among the CEO pays was taken into account. Charity Navigator also restricted its analysis to 3,005 charities rather than all 5,500 in its database.
Once selected, CEOs were sorted by geographical location and the size of their charities. They were also sorted by their charity’s category, which includes Animals; Arts, Culture, Humanities; Education; Environment; Health; Human Services; International; Public Benefit; and Religion.
Furthermore, Charity Navigator highlighted the highest salary in each category, such as the $2.65 million salary given by the New York Philharmonic to its highest paid executive, the $725,000 salary given by the Wildlife Conservation Society, and the $1.0 million given by the Scripps Research Institute. Also noted was the $661,000 salary given by the YMCA of Greater Houston and the $648,000 salary given by the Education Media Foundation.
Of the 3,005 charities included in the study, 14 paid their top executive more than $1 million. Those charities range in total expenses from $13.5 million to $3.5 billion. This list is comprised of eight Education charities; five Arts, Culture, Humanities charities; and one Health charity.
The study also revealed that 106 charities paid their CEOs between $500,000 and $1 million. Only one religious charity, Education Media Foundation, was part of this list.
“While this list is sure to astound many donors, salaries really should be judged in the context of the charity’s overall performance,” Charity Navigator noted.
In the concluding remarks of its study, Charity Navigator acknowledged that the paychecks of some nonprofit executives are “outrageously high,” but said those receiving excessive pay are in the minority.
“This study provides strong evidence that the majority of charity leaders are not excessively compensated,” Berger noted.
The charity evaluator also reiterated past recommendations made to charity boards to make an independent compensation committee responsible for reviewing the CEO’s performance and ensuring that the CEO’s pay is appropriate.
“We hope [this study] will improve the public’s confidence in the charitable sector, while helping them to avoid rip-off charities,” Berger added.
Charity Navigator's ratings are accessible at no charge at charitynavigator.org.