Is A One Million Dollar Nonprofit CEO Salary As Bad As It Sounds?

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American Cancer Society Cancer Action Network ...

American Cancer Society CEO John Seffrin

Your hard-earned money may be going toward a CEO’s multi-million dollar pay package. If you donate to the American Cancer Society, The Museum of Fine Arts Houston, or one of at least 18 others that the Chronicle of Philanthropy reported as having CEOs making one million dollars or more, then that’s exactly what you’re doing.

It’s easy to argue that this is outrageous, but is it really? As you might imagine, there are two very different perspectives on this issue.

That’s Too Much for a Nonprofit CEO

It is not just a general sentiment. Lawmakers in numerous states including New York, New Jersey, Florida and Massachusetts have tried to introduce legislation that would cap executive salaries at nonprofit organizations that receive public funding. Florida wanted a cap of $129,972, while Massachusetts sought to cap executive pay at $500,000.

So far, all of these bills have failed to gain legislative approval, though the battle is not over. According to New York Governor, Andrew Cuomo, “These regulations will allow the state government to identify and stop the few providers that pocket taxpayer dollars rather than use them to serve the public.”

The opinions of these lawmakers echo those of many people. If you are going to work at a nonprofit, you should have as your primary motivation the public good. It is reasonable to think that you would accept less compensation in order to move more money into the hands of those who need it.According to Bloomberg, CEOs of the largest U.S. foundations and charities received $429,512 on average. That’s a median pay increase of 3.8% in 2011. Other, smaller nonprofits gave their executives a pay raise of 2.7% according to the article (based on 2010 required tax filings).It’s Time to Change Our Thinking