Question: “I am currently in the process of filing a 501c3 for our nonprofit corporation. Part of the requirement for the application is to include our research by an independent party to justify the pay scale for our executive directors. I’d like to include a local report for Washington State that shows the pay-scale for executive positions in nonprofit organizations. Where can I find this?”
Answer: People often come to us for guidance on how much they should pay employees and contractors. If your 501(c)(3) organization files an IRS Form 990, then you are required to report executive compensation. It is expected to be “reasonable and not excessive,” while also being competitive enough to attract and retain excellent leaders.
The truth is that the nonprofit sector lacks good compensation data—there is no free, comprehensive compensation report. But you do have options! Here are seven:
- Guidestar (by Candid) has a national nonprofit compensation survey available for purchase.
- Some public libraries have a nonprofit/philanthropy section that is affiliated with the Candid’s Funding Information Network. These may have compensation reports available. The Redmond library has a physical copy in their reference section. If you choose to take this route, pay attention to the publication date!
- Look up IRS Form 990s of organizations similar to yours. These will disclose salaries over $100,000. Candid’s website has a 990 Finder.
- Ask your county’s community foundation or chamber of commerce if they collect compensation data for your area.
- Connect with professional associations in your sub-sector.In the museum field, the Western Museum Association (which includes Washington state) collaborated with the American Alliance of Museums to publish a National Museum Salary Survey in 2017.
- Associated Industries in Spokane offers a salary survey for Eastern Washington and North Idaho. It has a limited sample size and is not nonprofit-specific.
- The National Council of Nonprofits recommends a three-step process for setting reasonable compensation.
- RoadMap offers a national Social Justice Salary Survey and a Salary Policy Discussion Guide.
- Keela collects data from Canada, US, and Australia, plus sample job descriptions.
- Our friends at the Montana Nonprofit Association publish a biennial Nonprofit Wage & Benefit Survey.
- Idaho Nonprofit Center also publishes a report for their members.
Keep in mind that all of the sources mentioned here do not account for gender bias, classism, racism, and the other factors that contribute to salary gaps. They also do not reflect whether nonprofit salaries have kept pace with the regional cost of living. For further information on this, the Building Movement Project published a national report titled Obstacles and Opportunities in Addressing the Nonprofit Racial Leadership Gap, which includes high-level salary data.
Know of other reliable sources? Let us know!
Thank you for doing your due diligence when it comes to fairly compensating nonprofit professionals.