The issue of nonprofit executive compensation is once again making headlines. According to the Seattle Post-Intelligencer, the Boy Scouts of America's chief executive earned $589,000 in 2006, exceeding the 75th percentile level of average salary ranges for comparable nonprofit CEO salaries. Critics assert that these hefty salaries take the executives' focus away from fulfilling the organization's mission. However, Boy Scouts representatives insist that this level of compensation is needed to retain quality executives for the long-term.
Nonprofits have long been known for their poor staff compensation, not only with respect to yearly salary but retirement benefits. And the solution has been to create more attractive compensation to compete with the for-profit industry. Yet, with our current economy, does this practice still make sense given the increase of competition for foundation funds?
Since salaries are included as overhead in organizational budgets, many grants that will be awarded in the coming year will undoubtedly cover a portion of this. In this economic recession, should funders take into account higher than average executive salaries when considering whether to award a grant?
What do you think?