NFP Salaries - How Much Is Enough?
9 October 2000 at 12:10 pm
The title of Chief Executive Officer in the Not for Profit sector, as many will attest, is often misleading, as the CEO could be running a budget of $1M or $1B.
Each job in each organisation has a different description and currently salaries in Australia range widely from around $65,000 to $240,000 annually for the top job.
A scan of the American newspaper advertisements for a CEO in the Not for Profit sector suggests anything from $US30,000 to $US150,000 per year is on offer. And on today’s exchange rates these figures appear to be about the same as our own.
So how does the Not for Profit sector gauge what the top job is worth?
Human Resources Consultant and Associate Director of Silverman Dakin, Philip Mayers says very often a CEO in the Not for Profit sector might only hold a position comparable to middle level management in the corporate sector.
This he says may be the equivalent to a manager of a retail business, with financial compensation at that appropriate level.
Mayers says he has heard some lamenting that if they were a CEO in big business they would be earning $400,000 per year!
But he says the real issue is to come to terms with the huge area covered by the same job title.
According to Philip Mayers there are three key factors to consider. The first relates to the amount of knowledge a person requires to do the job, second is the freedom they have to apply that knowledge and make decisions, and third is their accountability.
Mayers says payment practices vary according to the level of all three. While those in the commercial world of computers and the stock market are at the high payment end, the NFPs are generally at the lower end.
And this is reflected down through the organisation. A stockbrokers secretary will earn more than a secretary in a Not for Profit job.
A check of Not for Profits through their publicly available annual reports and publications has found some vastly different approaches to paying a CEO.
One CEO of a national, religious-based NFP manages an annual budget of $177 million and controls a staff of about 3000 and 50,000-plus volunteers. The annual salary is less than $20,000 but includes a furnished house and a car.
The annual report of another large Australian charity shows that it has five executives on salaries of more than $110,000. The Not for Profit has an annual income of $21.2 million, a staff of 220 and 20,000 volunteers.
Philip Mayers believes expectations are lower in the Not for Profit sector and the main consideration has to be what is reasonable and what the market will pay.
Philip Mayer’s final word perhaps, to NFP workers is to try to join an organisation where the Board Members are all stock brokers, lawyers and accountants accustomed to a level of earnings in the six figures!