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By Jeff Jones
Nonprofit executives snug in their jobs can expect a raise this year that probably will beat the rate of inflation. But in this soft economy, nonprofits with open positions are pulling the salary purse strings tighter and trying to fill posts at a significantly lesser rate of pay. According to results of the annual NPT Salary Survey, there is overall stability in executive salaries. And, the earning power of female chief executive officers is gaining on their male counterparts, according to survey results from 244 nonprofits. Nonprofits anticipate an average staff pay increase of 3.3 percent for 2003 -- a bit less than 2002's average raise of nearly 3.7 percent. The projected salary bump in 2004 sits at roughly 3.4 percent. But, when filling open positions, mostly they are paying less. A salary drop is most pronounced for planned giving officers. The projected 2003 average salary for that position will decrease $4,147, or roughly 6.3 percent. The average salary for the top executive job projected for 2003 at $88,749, a decrease of $252 from 2002's $89,001. Other positions projected to post an average salary decline are major gifts officers, which will see $415 shaved from the salary, and Webmasters will slip just $73. Only two positions' average salary increase -- director of volunteers (5.7 percent) and chief of technology (3.7 percent) -- are projected to beat the latest 2002 rate of inflation (2.37 percent for the year as of November, according to the U.S. Department of Labor). The position showing the largest gain in 2003 by dollars is chief of technology at an average increase of $2,094, or 3.7 percent. This is the second year this position is included in the survey. Salary averages for an organization's leader, planned giving officers, major gifts officers and webmasters are projected to decline 0.28 percent, 6.3 percent, 0.72 percent and 0.19 percent respectively. Average increases for the other spots (chief of direct marketing, CFO, program director and development director) range from 0.26 percent for chief of direct marketing to 2 percent for program director. The results show stability overall, although certain sections of the nation are a little rocky. "I come away, (after) taking a look at this, saying stability is a good thing," said David Edell, president of executive search firm DRG-Development Resources Group in New York City. He said the responses were particularly good, "in this environment, in this economy, as it compares to what is happening in the private sector," where employment stability is much more vulnerable. Another positive sign is that the earning power of female chief executive officers is approaching that of males for 2003, but a significant earning discrepancy existed in 2002 when male CEOs earned 31.5 percent more than female counterparts. "We're seeing more and more women getting into the top positions, but their salaries aren't increasing as much as their opportunities," said Colette M. Murray, president and CEO of the executive search firm Paschal Murray in San Diego. Murray said sometimes women, particularly if a spouse has a good salary, will accept less. "We're still doing it to ourselves. We're willing to accept less. We're not as tough at negotiating." Salaries for the males in the top job outpaced females in 2002 by an average of $24,756. The discrepancy will lessen in 2003 when men are projected to receive an average $18,338 more than women. This news comes despite the fact that the top job are more likely to be females (54.4 percent) than male (45.6 percent), according to survey responses. "The trend reflects what we're seeing, which is a much greater awareness of prior imbalances and inequities, a much greater sensitivity to the issue, and an attempt on the part of a lot of hiring organizations with the help of people who are involved ... to make sure that gender isn't an issue in the negotiating process," Edell said. Information on the following nonprofit positions was sought in the NPT Salary Survey: executive director/CEO/president, chief financial officer, program director, planned giving officer, development director, major gifts officer, chief of direct marketing, director of volunteers, webmaster, and chief of technology. The mean projected salaries for these positions for 2003 are:
Average salaries at four nonprofit management-level positions are projected to decline for the first time this century. Projected salary decreases are insignificant and "often reflect job changes and the ability to bring in someone at a level different from a more seasoned executive who may have left the position," Edell said. Roanne L. Barnes, executive vice president and co-owner of executive search firm Barnes Development Group in Mequon, Wis., said the nonprofit sector has been fairly strong through the last year. "They seem to be holding their own, at least from our standpoint," said Barnes, where nonprofit and service sectors accounted for about 50 percent of business last year. "They have continued to replace executive directors when they needed them." True to form, nonprofits with the largest budgets paid executive directors the most in 2002. Nonprofits with a budget size of $50 million or more paid executive directors an average of $214,619 in 2002. Organizations with a budget of less than $500,000 doled out an average $41,000 to executive directors. The average 2003 projected CEO salary by type of organization is: civic $153,000; association $108,855; religion $102,067; foundation $101,173; education $93,942; health $91,855; government $85,269; social/welfare $81,887; other (which includes environmental) $75,180; cultural $74,439. An overwhelming number of executives (87 percent) receive a raise annually. Approximately 6 percent said they receive raises in periods longer than two years. Talk of performance-related bonuses fell on deaf ears at a majority of nonprofits. Only 13 percent offer top executives such bonuses. Those organizations that gave their fearless leaders a performance-based bonus paid the CEO position an extra $5,384 and nearly 8.7 percent of their salary on average. Chief financial officers got an average 6.7 percent increase, which equates to $3,416. Webmasters charted the highest average performance-based bonus by percentage of salary at 12 percent or $2,500. Edell said his firm is witnessing more bonus and incentive arrangements involved in compensation agreements. Nearly 69 percent of nonprofits, however, don't give their top executives an employment contract. Organizations that offer an employment contract likely give it to a chief executive, and the offer most commonly covers starting salary with expense allowances a distant second. Some 34 percent of respondents that don't offer such contracts would consider it if a new CEO requested an employment agreement, 44 percent were unsure what they'd do, and nearly 22 percent wouldn't agree to one. Even when an employment contract is in hand, executives shouldn't expect a one-time bonus. Just less than half (46 percent) of responding organizations said if they had to recruit a new CEO they wouldn't consider a one-time bonus. If you're a staff member, most likely your raise hinges on a combination of accomplishments and general increases. Nearly 56 percent give raises based both on merit and general increases, compared to 25 percent of staffers received a monetary pat on the back via general increases and 19 percent received increases based only on merit. During the last three years, the majority of organizations (76.9 percent) said hourly and salaried non-exempt staff and exempt salaried staff received about the same proportional increases. Roughly 12 percent said non-exempt pay is increasing faster by a mean rate of 8 percent. Location, location, location The Mid-Atlantic region is the best place to land a job if money is the motivation, and you're an executive director. It led all regions in 2002 with an average salary of $99,625 and is projected to lead regions in 2003. The Mid-Atlantic region, which includes the nonprofit heavy Washington, D.C. area, was king of the regional heap by average salary for three other positions in 2002. (See the accompanying charts.) The South region paid the lowest to executive directors, an average of $77,155 in 2002, and is projected to be the regional low pay on the totem pole for 2003 at $74,934. When broken into regions, CEOs will see an average 2003 salary of $101,663 in the Mid-Atlantic; $93,854 in the Southwest; $86,726 in the Central; $85,017 in the North Central; $82,745 in New England; $82,100 in the West; and $74,934 in the South. Murray advised job hunters to get salary information specific to the city. She added "Most of the salaries today are driven by the cost of housing."
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