Mission Driven Millionaires - Brief Summary of Non-Profit Compensation
Non-Profit Compensation. What is reasonable, and how much is too much? What happens when “grassroots” turns into a goldmine? Below, we present a brief summary five of the top environmental non-profits.
Note: These are not “the top 5”. Just five of some of the larger non-profits. Specific names are not given, but these numbers can be verified through publicly available resources, such as IRS Form 990 data. As used herein, “compensation” means salary, benefit, pension, and those other items typically classified as compensation.
Peer #1
CEO compensation of over $1.2 million.
12 others making at least $280k in yearly compensation
399 people receiving more than $100k in yearly compensation
About 40% of total non-profit expenses was for compensation
Peer #2
CEO compensation of $900k
15 others making at least $280k in yearly compensation.
A staggering 1,525 people receiving more than $100k in yearly compensation!
About 40% of total non-profit expenses was for compensation
Peer #3
20 executives/directors making at least $195k in yearly compensation
289 people making more than $100k
About 58% of total non-profit expenses was for compensation
Peer #4
16 executives making at least $275k in yearly compensation
404 people making more than $100k
About 52% of total non-profit expenses was for compensation
Peer #5
CEO compensation of $1.2 million
11 others making over $350k in yearly compensation
415 people making over $100k
About 50% of total non-profit expenses was for compensation
Compared to each other, these five peers are about the same. A huge amount of non-profit expense is spent on compensation. How do they get away with it?
Misleading the public and their donors.
How? Many of these non-profits will use catchy graphics that are designed to make you think that only a small percentage of their expenses are for general management and fundraising expenses, with the bulk being spent on their missions/programs.
The Truth? You have to really dig into their financials to see how they do it. Typically, each mission or program has its own compensation and fundraising expenses. So while a CEO may be part of the low general management expense, each program has its own team of executives, staff, fundraising contractors, etc. You have to know where to look, and these organizations know that most of the public will not look, or won’t know where to look. We call it what it is…misleading.
Peer Group Example: One non-profit discussed above proudly displays that only 5% of total expenses go to general/management expenses, with an “impressive” 87% being spent on their missions. The reality is, across their core programs, about 46% of total program expense is on personnel, 17% on “consulting fees” (typically, outside fundraisers), and 6% on advertising/mailing. That’s nearly 70% just on paying themselves and trying to raise more money. What are they actually spending on their mission? Good question.
The reality is, they don’t really spend much on their mission. Donated funds, grants, endowments, and their other assets are held for the long-term, typically to bring in investment income. So as long as they can spend less than the investment income, these non-profits look like they’re doing great work. They’re not actually deploying the dollars their donors have given them to make a change. The last thing a large non-profit wants to do is spend down your donated dollars.
Another kick to the donors? A lot of these non-profits talk about “grassroots”, economics, discipline, and accountability.
There isn’t much “grassroots” about becoming a millionaire off of your donors.
What about ERGF?
(TY2021 - TY2025)
Director Compensation: $0.00
Executive Compensation: $0.00
Consulting Fees: $0.00
Online Advertising: $0.00
Mailers: About $500-750 a year, highly targeted with results constantly tracked. If you received mail from us, it is because we wanted you, specifically, to get it.
Tired of bloated non-profits wasting your money? Call or Email us. We would love to work with you, and put your dollars to actual work.
