- The Washington Times - Sunday, October 4, 2009

The Chronicle of Philanthropy released a study this week showing that three in 10 nonprofit chief executive officers (out of the 185 organizations polled) have taken a pay cut because of the recession. The median pay-cut percentage was 10 percent. The 17th annual Nonprofit Executive Compensation Study reported that pay raises for nonprofit “may be flattening.”

Over the past 17 years of the study, the median year-to-year change in compensation has matched or outpaced inflation, according to the press release. The median change in nonprofit CEO pay in 2007-08 was a 7 percent increase despite the weakening economy. However, Stacy Palmer, editor at the Chronicle of Philanthropy, said the nonprofit world tends to lag behind the for-profit world.

“When people do their charitable giving, they are working ahead,” Ms. Palmer said. The median 2008 CEO pay package at the big organizations, such as the American Civil Liberties Union Foundation and J. Paul Getty Trust was about $360,000, including salary and benefits. The for-profit world felt the crunch from the economy sooner. According to the New York State Controller’s Office, Wall Street cash bonuses fell 44 percent from 2007 to 2008, as noted in the study. Some nonprofits in the Washington metropolitan area that recorded CEO pay cuts were the Association of Fundraising Professionals in Arlington, Gifts in Kind International in Alexandria, GuideStar USA Inc. in Williamsburg and Public Broadcasting Service in Arlington.

“In most of the cases, the nonprofit executives were very much in support [of a pay cut],” Ms. Palmer said.

She also suggested that this trend toward voluntary pay cuts will continue through 2009 and into 2010. According to the press release, the pay cuts will happen by the CEOs passing up a raise, forgoing a bonus or taking an unpaid furlough. “It will happen across the country,” said Ms. Palmer in terms of nonprofit CEO pay cuts. “It’ll be embarrassing for those that don’t.”

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