Wise Giving Wednesday: Understanding Charity Compensation

Charity compensation often raises questions, but a salary figure alone rarely tells the full story.

Why Charities Need Paid Professionals

A common refrain when the topic of charitable giving comes up is that “charity CEOs and staff make too much money” or that “charities should only be spending money on programs.”

When giving a heartfelt gift to an organization helping those less fortunate or one that aligns with your personal values, it is natural to want all of the donation to directly benefit the cause. The desire to ensure that “every cent” reaches those in need can be especially powerful during emergencies, such as natural disasters. For example, in the aftermath of a hurricane or wildfire, many people feel compelled to help right away.

However, even the most efficient charities cannot do their work without compensated professionals. Volunteers are essential to many charitable organizations, but for most charities, relying exclusively on volunteers is not realistic or practical.

Common Questions About Charity Compensation

Here are some frequent questions about charity salaries:

Are all salaries “overhead” expenses?

One common misperception is that all charity salaries are “administrative” or “overhead” expenses. This is not the case, as salaries can appropriately be allocated across major expense categories: program, fundraising, or management and general, depending on how the employee’s time is spent. 

A single staff member at an animal shelter, for example, may spend time providing direct adoption services in the morning (program expense), managing staff schedules during her working lunch (management and general expense), and calling donors in the afternoon (fundraising expense). One staff person. Three roles. All critical to the success of the charitable mission.

Where can I find out how much charity executives are paid?

You can find key information about charity employee and officer compensation, as well as a roster of the board of directors, in the IRS Form 990, the annual financial form completed by charities (excluding houses of worship). This level of transparency is not often seen in the business world but has been standard practice in philanthropy for decades.

You can visit the IRS website to search for charity Form 990s here. You can also find the CEO or chief executive salary information in the “governance and staff” section of each BBB WGA charity report. An alphabetical list of BBB WGA charity reports is available here.

How is charity CEO salary determined?

Determining a chief executive officer’s salary is a core responsibility of the board of directors. The board considers a number of factors when determining CEO compensation, including the charity’s location and cost of living, nonprofit salary surveys, the size of the organization’s staff and finances, specific executive responsibilities, and the individual’s professional experience, among other factors.

A CEO of a large charity with revenue and expenses in the tens of millions of dollars, thousands of employees, and domestic and international programs will naturally have a different level of compensation than the executive director of a small, local animal shelter. Both charities are doing important work, but there are significant differences in the scope of responsibility.

Charity executive salaries are, generally speaking, much lower than those for similar positions in the private sector. While most people want to earn a competitive living, charity executives and staff are often mission-driven and motivated by more than just a large paycheck.

Compensation, Transparency, and Mission

Transparency about compensation is an important part of charitable accountability. At the same time, charities need skilled, dedicated professionals to deliver effective programs, manage resources responsibly, and achieve lasting impact. Understanding how salaries support an organization’s mission allows donors to make more informed giving decisions.

Recent Reports

We are always working with charities to publish or update reports for donors. Visit Give.org to check out any charity before giving. Our recently evaluated charities include:

• America’s Charities
• Catholic Medical Mission Board
• School the World

Finally, remember to let us know by going to give.org/charity-inquiry if you are interested in seeing a report on a charity not on the list and we will do our best to produce one.