Is Nonprofit Salaries Spinning Out of Control?



Posted: Wednesday, December 19, 2007

by
your luminosity

The heart of the current discussion about America 's nonprofit community is accountability and the disclosure of information. The quandary is how can we really know the ways our resources are being used and whether they are supporting the goals that we had intended as nonprofit organization Rogers (2005) emphasizes. Over the past few years, a few high-profile scandals in this sector, have put a spotlight on this. The public is focusing on it and this has inevitably led to increasing scrutiny in the government at various levels as well. ( Rogers , 2005)

Charity is serious business. Charitable organizations are no longer (as many assume) simply associations of volunteer do-gooders. Nonprofit organizations provide medical care, preschool through university-level educations, museum exhibits and arts performances, care, workforce training and education, counseling, food and shelter, housing and economic development, and much more. In fact, most nonprofit organizations confront many of the same challenges as for-profit enterprises: attracting investment, hiring and realigning skilled employees, controlling quality, marketing and maintaining a competitive advantage. (Manzo, 1998).

The strong economy and tight labor market of recent years, have spurred by high degree of excess in executive compensation in corporate and nonprofit America . Nonprofit executive salaries have been significantly more controversial than increasing executive compensation in the corporate sector. (Gantz and Twombly, 2001)

Yet fundamental questions remain: Are salaries in the nonprofit sector really too high? Should salaries be regulated to block the unwise transfer of charitable resources? Will the IRS's new regulatory effort succeed in controlling nonprofit compensation?

By Tiffany Brown, MPA

Tiffany Brown is President and CEO of YourLuminosity.com, and specializes in non-profit management. She has worked for various capacities in public sector such as the Democratic Party of Georgia, Georgia Law Center for the Homeless, Georgia Conservation Voters, the United States Government Accountability Office, the Fulton County District Attorney's Office, Supreme Court of Georgia, and the Atlanta Bar Association.

References

Manzo, Peter. (1998) "The Importance of the Nonprofit Sector." The Los Angeles Business Journal (20) 46 Available online: http://www.cnmsocal.org/AboutNonprofits/Article3.html

Rogers, J. (2005) The Answer to Accountability? The Urban Institute . Available online: http://www.urban.org/publications/900780.html

Twombly, E. and M. Gantz. Executive Compensation in the Nonprofit Sector:

New Findings and Policy Implications. Urban Institute. Available online: http://www.urban.org/publications/310372.html

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