In Praise of Non-Profit CEOs

10/10/2012 03.35 EDT

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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:   “It’s not like they have shareholders!” “They don’t have to worry about competition!” “They shouldn’t expect to be paid well for their work – they are in a non-profit.”   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:   The non-profit has many more stakeholders; clients, foundations, board members, politicians, donors, customers, regulators – the list...