Salaries at nonprofits up over last 10 years, official says

• By EMILY KERN HEBERT
• Advocate staff writer
• Published: Jul 5, 2009 - Page: 1D

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Top executives of Baton Rouge area nonprofit organizations often are paid six-figure salaries.

In other parts of the country, those salaries have been questioned for being too high and out of proportion with the amount the organization spends to fulfill its mission — whether that be running an animal shelter or a nonprofit hospital.

Kellie Chavez Greene, development director at the Louisiana Association of Nonprofit
Organizations, said salaries for nonprofits have been on the rise for the past 10 years.

“Nonprofits are being called on to solve some of our community’s most challenging issues,” Greene said. “That requires a keen and savvy staff.”

The nonprofit sector includes a wide range of organizations, from community groups with no paid staff to hospitals and universities with billion-dollar budgets.

“It’s remarkable. It’s much broader than most people realize,” said Tom Pollak, program director of the National Center for Charitable Statistics and senior research associate for the Center for Nonprofits and Philanthropy at The Urban Institute.

Pollak said the nonprofit sector includes more than 600 categories, including the arts, education, environment, health care and human services.

In 2005, United States nonprofits had assets of $3.4 trillion, Pollak said.

The Internal Revenue Service, which requires nonprofit organizations to report the salaries of officers, directors, trustees and key employees, has established procedures for nonprofits to follow when establishing salaries.

During the late 1980s and early 1990s, stories in the national news told of wasteful and ineffective charities and self-serving, greedy or dishonest executives.

In 1996, the federal government responded by establishing guidelines for developing reasonable compensation of nonprofit executives with the Taxpayer’s Bill of Rights 2, Pollak said.

The procedures developed by the IRS that came as a result of the bill required boards of directors to do their due diligence to compare a proposed salary with the fair market value for that position, Pollak said. The key decision the IRS made was that the fair market value could include for-profit organizations, he said.

The majority of regulators feel that higher salaries are acceptable in such fields as health care and higher education, Pollak said.