The Board’s Responsibility in Pay Equity

By Dr. Carrie Tancraitor

Nonprofit board members have A LOT of responsibility. These individuals are charged with guiding decisions to ensure the organization effectively carries out its mission. One of their most critical jobs to fulfill this obligation is to select and compensate the executive director.

“Reasonable and not excessive” compensation is the IRS standard. In order to ensure this standard is met, the IRS recommends the board (or a faction of it) look at “comparable” salary and benefits data to understand the compensation practices of nonprofits with similar missions, budget sizes, in an analogous geographic area. The biannual Wage and Benefit Survey, published by the Bayer Center for Nonprofit Management, allows organizations to do just that. It enables boards of directors to benchmark executive salaries based on numerous variables (including budget size, geography, field of service, funding source, number of employees, level of education, tenure).

However, the tool offers much more because boards of directors have obligations beyond the chief executive. Since 2002, this vitally important resource has been helping boards understand regional nonprofit compensation practices, employment practices, insurance and retirement benefits. Additionally, the Bayer Center for Nonprofit Management has documented gender wage inequities through the biannual Wage and Benefit Survey. This trend was also evidenced in the Bayer Center’s 74% project. With compensation data for 129 positions, boards have a responsibility to repair flawed compensation practices and instead establish equity throughout the organization.

The 2019 survey is currently available for purchase.

Carrie Tancraitor is Associate Director at the Bayer Center for Nonprofit Management at Robert Morris University, responsible for the collection and analysis of customer, demographic, and survey data. She also contributes original research to various studies on the nonprofit sector. Carrie was a Schreyer’s Scholar at The Pennsylvania State University, holds a master’s degree in public administration from the University of Delaware and a Ph.D. from Robert Morris University. An active volunteer, she is a marathoner and proud parent to three spirited boys.