Nonprofit executive pay can reach six figures

October 20, 2008
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A study by Grand Valley State University's Dorothy A. Johnson Center for Philanthropy and Nonprofit Leadership revealed big gaps in nonprofit executive pay between West Michigan and Southeast Michigan, society benefit organizations and foundations, and men and women.

Released in September, the study put the average salary for top executives in West Michigan nonprofits at $80,394, compared to $94,395 in Southeastern Michigan. Paychecks for nonprofit leaders in six other areas of Michigan fared even worse, with averages ranging from $54,318 to $79,139.

Leaders of public/society benefit organizations earned an average $52,672 in four West Michigan counties.

Men in the top jobs barely edge out women, 51 percent to 49 percent. But the bigger the organization — and the more the pay — the more likely men are to hold the executive post. Men average $96,823 to $64,215 for women.

The center conducts a statewide salary study every two years for the Michigan Nonprofit Association, said Pat Nanzer, associate director of special projects for the Community Research Institute, who collects and analyzes the data.

Nanzer conducted the current survey of 64 job titles in 8,300 federal tax-exempt organizations in Michigan with at least one half-time employee from fall 2007 through February. She culled data for leadership positions such as executive director, program director, supervisor or manager, chief financial officer and development director for the recent summary report. She received about 170 responses from West Michigan, which includes Kent, Ottawa, Muskegon and Allegan counties.

"This time, there were no trends we could pull out," Nanzer said, because of the shifting set of respondents. "Because the participants are not always the same, we were not able to pull any threads, so there were no conclusions we could draw."

Proaction Behavioral Health Network President Mike Reagan said his organization uses the Johnson Center survey as part of its own study, which is conducted every two years. The organization, which provides mental health counseling as well as outpatient and residential substance use disorder treatment in Grand Rapids and Detroit, employs between 250 and 275 people.

"We try to get some equity between what we offer and what the markets are doing," Reagan said. "We use it as a regular part of our strategic planning to try and remain competitive."

The board of directors sets Reagan's salary, but also conducts a study on which it is based, he said.

Bethany Christian Services is a large adoption agency with 70 offices nationwide and does business in a dozen countries, Director of Human Resources Jim Cameron said. A compensation committee, made up of leadership team members, sets salaries for every post but the top one, which is decided by the board of directors.

"We try to compare ourselves to similar organizations," he said. "We want to compare apples to apples. We want to be above the midpoint of salary ranges. The scope of our responsibility, the size of our organization — we're a very complicated organization. We made the decision that we feel we could be above the midpoint for compensation level for our employees."

For top executives, the GVSU study showed that additional benefits and bonuses averaged in value at $2,888 and included such perks as extra vacation, cell phone use, professional development, memberships, expense accounts, life insurance, tuition reimbursement, car and deferred compensation.

Cameron said Bethany executives get the same benefits package as everyone else, but, he noted, "typically, salaries are modest but benefits packages are pretty good for nonprofits." About half of Bethany's 1,000 employees are eligible for health benefits, and the organization has been self-insured for 20 years, Cameron added.

Executive Director Salaries,
West Michigan Nonprofits, 2008

Organizational Budget       
$100,000 and Under
$500,001-$1 million
$1,000,001-$2.5 million
$1,250,001-$5 million
$5,000,001-$10 million
More than $10 million

Average Salary

Source: “Executive Compensation in Nonprofit Organizations in West Michigan,” Community Research Institute, Dorothy A. Johnson Center for Philanthropy and Nonprofit Leadership, Grand Valley State University

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