Non Profit Compensation Packages

While it is accepted that non profit compensation packages are often less than comparable private sector positions, the common elements of a non profit compensation package are the same, including:

• Base salary


• Insurance policies including life, health, indemnification


• Contribution to pension


• Supplemental benefits


• Reimbursement for education expenses


• Other benefits, such as car allowance, driver, free parking, housing allowance, etc.


• Sabbatical leave


• Executive expense account


• Employment contract


• Termination clause


• Assessment policy


• Severance package

Developing non profit compensation packages

A non profit’s compensation philosophy is typically linked to their mission and core competencies, meaning the organization’s chief purpose and its perceived importance is often considered when developing compensation packages. When developing a non profit compensation package for new or existing positions it is important to consider:

• The size and complexity of the nonprofit


• The mission area, geographic location and financial condition of the organization


• The qualifications required for the job


• Compensation at comparable organizations

The compensation of non profit executives usually lags far behind the compensation of leaders in business and government. The real challenge many boards face is not how to reign in excessive compensation but rather how to find the resources to pay appropriate salaries.