The simple step of assigning one person to look up the salaries of comparable organizations can set a helpful context for the board. The executive director’s salary should make the organization competitive in the market for talent. If the answer is a similar nonprofit, look at the salaries of comparable nonprofits in the area. A good idea in any event, but with a median salary of $75,000 for nonprofits with budgets between $1 million and $2.5 million, excess compensation hardly seems like the biggest problem. Even with these core factors for consideration, executive director pay scales are all over the map.

What is not a successful budgeting strategy?

• If you want a headstart, you can jump straight to my free Executive Director Salary Calculator.
• But it would help if your employees receive compensation in line with salary surveys of similar groups.
• You are responsible for the tithes and offerings given to your organization, often from individuals or families who make deep financial sacrifices.
• (Note that employees who are not eligible for health insurance are excluded from this calculation.) This calculated average can be used for each full-time equivalent (FTE) position in your budget.

I recommend starting by understanding the core responsibilities of an executive director. If you’re creating or reading a job description that doesn’t include these core responsibilities (such as a small foundation that really just wants administrative support), it’s worth taking a step back and reconsidering. For both parties, however, it’s essential to understand the full scope of the role and expectations. This is one of the areas that seems obvious at first (an executive director runs the organization) but can become an incredible pain point down the road.

• Obviously, donors want as much of their donation as possible to go to your programs, to help change lives.
• Feeling confident in their budget, the financial team presents the budget to the church like Moses bringing down the ten commandments.
• If legal advice or other expert assistance is required, the services of a competent professional person should be sought.
• Modern solutions like predictive analytics can help you visualize past and future scenarios and are often built into commercially available nonprofit accounting solutions.
• Successful nonprofits learn to manage a mix of volunteer and paid staff to accomplish their missions and serve their communities.
• Or once they develop a good relationship with a grantmaker, they count on that grant to be renewed year after year and don’t search for new opportunities.
• And one of the prominent financial tools that have fostered financial stability over the years is a nonprofit line of credit.

Program-specific budgets

Our data and technology teams at Candid acted quickly to process this massive influx of data to make it available in our offerings—like the report—that the sector relies on. This allowed us to produce the most complete analysis of fiscal year 2021 and illuminate the continued impact that 2020 had on the sector. Drawn exclusively from data reported on IRS Forms 990 and 990-EZ, our annual report provides in-depth information and insights on executive compensation from over 123,000 tax-exempt organizations for 5 Main Benefits of Accounting Services for Nonprofit Organizations fiscal year 2021. Candid’s team also added 21 new metropolitan statistical areas (MSAs) to the report this year to allow for greater geographic comparisons. Last week Candid hit a milestone, launching our biggest, most robust nonprofit compensation report yet.

Balancing Passion and Compensation

• Differentiating between nonprofit donors vs. investors is a key part of fundraising, as is learning who your investors are, what they value, and what return on investment they expect to see from your organization.
• Inflation has been low for the last decade with most salary budget increases trending above the inflation rate.
• However, nonprofits are also businesses, and most have qualified paid staff who operate and maintain the business side of the operation and deliver its services.
• By involving staff from various departments in the budgeting process, you get a more accurate and realistic picture of your financial needs.
• It takes time to get up to speed, cultivate relationships, and implement a new strategy.
• Yes, there are organizations like GuideStar and others that produce salary summaries annually and this data is important.

However, in my experience, the vast majority of unpaid executive directors would prefer some form of compensation but the organization may not have the funds. For example, when someone accepts the role of executive director, the assumption is often that salary will go up with merit and cost of living adjustment (COLA). But if an organization is facing financial strain, it may consider reevaluating salaries, which comes with its own consequences! |Whereas, with an employment contract, details like annual raises, performance reviews, and even severance are spelled out in advance. Despite what you may read online, there is no average executive director salary number that you should aim for.

How can I find the salaries of nonprofit employees?

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