Re: Salary Histories

["Michael L. Wyland" <michael -at- sumptionandwyland -dot- com>]

Mike:

There are a couple of considerations about nonprofit executive pay 
that do not apply to most employment.

First, the IRS has established regulations with which all nonprofits 
must comply when setting executive pay.  Basically, the nonprofit 
must be able to document the appropriateness of the compensation 
package using industry standards.  As a result, many nonprofit boards 
of directors commission salary surveys during the executive search 
process.  When the time comes to make an offer to the successful 
candidate, the board has a documented salary range that the IRS 
expects them to hone to pretty closely.

Second, since nonprofit executive pay (at least for the "top 
management official" (CEO/ED) and the "top financial official" 
(CFO/business manager/etc.) is public record, accessible through the 
nonprofit's annual Form 990 filings, any applicant has a good idea 
what the nonprofit's expected salary range is likely to be.  The 
pressure to increase that number to attract the right talent may be 
opposed by the regulatory requirement to justify compensation (see 
above) and the facts and circumstances of the previous executive's 
compensation; e.g., time in service vs. advertised experience 
requirements and qualifications of the identified
applicant.

As a consultant assisting nonprofit boards in the hiring process, I 
often find myself on the side of asking boards to consider increasing 
an offer to get the right candidate.  Many board members are 
conservative with money that is not their own, and for which they 
feel a fiduciary duty to spend wisely on mission-related 
activities.  In other words, they're not cheap - they're afraid.  My 
challenge is to show the nonprofit board that the right executive is 
a wise investment that yields mission-related rewards that can be 
justified to the IRS and anyone else (media, donors, watchdogs, et. 
al.) who reads the Form 990.



Michael L. Wyland
Sumption & Wyland
818 South Hawthorne Avenue
Sioux Falls, SD  57104-4537
(605) 336-0244
(605) 336-0275 (FAX)
(888) 4-SUMPTION (toll-free)
michael -at- sumptionandwyland -dot- com

Since 1990
Strategic Planning * Executive Coaching * Training & Facilitation * 
Grantsmanship

-- Web site:  http://www.sumptionandwyland.com
-- Sumption & Wyland blog :  http://sumptionandwyland.blogspot.com/
-- LinkedIn Profile -- http://www.linkedin.com/in/michaelwyland





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