10/10/2012 03.35 EST
A while back, I was contacted by a journalist who was upset about CEO compensation for non-profit executives. He thought many of them made too much money, which he found especially galling since he thought they had cushy jobs.
Specifically, he said things like:
I’ve written before about non-profit organizations and I serve on the boards of several right now. I also spent the first few years of my career in non-profits, first in the mental health sector and later in a social services agency as a fundraiser. But it’s really my board experience, including serving on or chairing several search committees for non-profit leaders, that has formed my views on the issue of compensation for non-profit executives.
First things first – I fully support the notion that non-profit CEO compensation should be transparent and should not create an undue burden on the budget. However, I think we also have to be realistic about the unusual, complex skill set required for success in this sector. In fact, I contend that it is probably a much more difficult job to run a $50 million non-profit than it is to run a $50 million private company. Here’s why:
I often have the chance to speak with people who are networking on their way to a new job. Sometimes they are senior-level executives who have made their mark (and their cash) in the for-profit sector and now want to “give back” by taking on a leadership role with a non-profit. It sounds good on paper, and it sometimes works, but they are usually shocked by the size of the challenges they find and the lack of resources in the non-profit world.
The non-profit sector is a critical part of our economy and society, often filling in the gaps in areas where a strictly commercial enterprise would fail. Let’s think about balancing the value they bring to the compensation their leaders receive.