Tom is a multi-disciplined leader with over a decade of experience in nonprofit operations, technology leadership in government, and over accounting services for nonprofit organizations two decades of servant leadership. Just like in the for-profit world, pay increases with specialized knowledge, increased responsibility and accountability, and management span. Interestingly enough, program staff may not be the most highly-compensated roles yet they are the front-line staff performing the boots on the groundwork. This website is designed for general educational and information purposes only. The information presented or linked to on this website is not legal advice and your viewing of this website does not create an attorney/client relationship. Further, the information presented or linked to on this website is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.
- The decisions you make about revenue and expenses should always align with your organization’s goals and the impact you’re striving to achieve.
- Keeping this ratio favorable enhances financial sustainability and reassures donors that their contributions are maximized.
- Your board also has to consider compliance issues related to fundraising expenses.
- For example, imagine you’re the executive director of an organization that runs an afterschool program.
- Generally, executive leadership, financial leaders (CFO, Controller), technology, and data science roles can receive premium pay.
Approving executive compensation
Divide the annual amount by the number of months left in your fiscal year. Here are some tips and tools to help ease the pain of building your next budget. For more skill development, coaching and tools, check out StriveTogether’s upcoming courses. Find compensation analysis for 14 executive leadership positions and example titles included in each category. Overall, watchdogs can be instrumental in improving nonprofit performance, increasing public trust and inspiring philanthropy. No one wants to be judged or called out for spending too much on overhead.
What Factors Influence Executive Director Salary and Compensation?
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Bursting at the seams: Candid’s largest nonprofit compensation report yet
It helps you communicate how you’re going to make the difference you want to see in the world. Organizations should treat all employees equally in how you apply your compensation philosophy and you should have an HR professional and an attorney evaluate it annually. Salaries will typically be a significant part of program expenses as well as administrative (management/other) expenses.
In this comprehensive guide, we’ll walk you through everything you need to know, from setting up a budget framework to leveraging tools like Excel templates. We’ll explore how to align your budget with mission goals, optimize resource allocation, and navigate the complexities of fundraising and financial reporting. By the end of this guide, you’ll have a clear roadmap for creating a nonprofit budget that supports your organization’s vision and ensures long-term success. According to Charity Navigator, nonprofits should spend less than 10% on fundraising spending. Charity Navigator also promotes healthy spending on activities because nonprofits that spend less than a third of their budgets on program expenses are likely to be failing to meet their missions. If you’re nervous about spending on fundraising, start slow and gradually build in fundraising expenses that will give you a good return on your investment while keeping all your general operating expenses under 35%.
- By co-creating how you’ll be measured in your annual review, you set yourself up for success.
- Restraint is recommended in how much an organization should add to their overall salary budget to prevent longer-term consequences of paying more than an organization’s desired market position.
- By the end of this guide, you’ll have a clear roadmap for creating a nonprofit budget that supports your organization’s vision and ensures long-term success.
- A percentage higher than this might indicate spending that’s disproportionate to the amount of money a group can raise.
- Even small changes to staff time and effort allocations can have a big impact on program effectiveness and the organization’s bottom line.
If you would like to talk with us about any of the topics discussed here or are interested in https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ having us conduct a compensation study for any of your executives or employees, please contact us. We can recount many examples of the importance of having a comprehensive compensation philosophy and policy in place. Excel’s budget templates are highly customizable and can significantly streamline your financial planning process. By leveraging these tools, you can create a detailed and organized budget that aligns with your financial objectives. At the other end of the spectrum are organizations that overspend on fundraising while chasing every new idea and hoping against hope that something will land. If you are a small nonprofit that spends next to nothing on fundraising, you are hardly alone.