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Can Salaries Be Too High In The Nonprofit Sector?

Can Salaries Be Too High In The Nonprofit Sector?

We’ve discussed how many nonprofit employees are worried about their financial futures and monetary compensation while working in the sector. Meanwhile, there are nonprofit executives on the other end of the spectrum, making millions of dollars a year. The Huffington Post posted a list of the highest-paid nonprofit executives, including Laurance Hoagland Jr., the chief investment officer at the William and Flora Hewlett Foundation, and John Seffrin, the CEO of the American Cancer Society:

"In 2010, one-third of nonprofits surveyed provided bonuses to their well-paid executives, and the median bonus was over $50,000. This year, top executives are expected to receive modest increases, from 2.5 to 3.5 percent. But when you’re making what the highest-paid executive on our list does—$2.5 million a year—that’s a decent raise. More than 20 nonprofit groups paid top executives more than $1 million a year in 2010 and 2011, according to [a September report from the Chronicle of Philanthropy]."

Many people feel the funds donated to nonprofit organizations shouldn’t be used to provide such high salaries to their executives, while others see it as a price to pay to attract and retain the talent necessary to keep nonprofits thriving.

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