Nonprofit Executive Search: How Is Salary Range Determined?

by Laurie Minx
Director of Client Relations
The Moran Company  “We Find Great Nonprofit Executives”

When a nonprofit organization begins a search for a new Executive Director or Development Director, one of the questions we get is how to determine the salary range. This is an important consideration because it determines the quality and skill level of candidates you are able to attract. The Moran Company provides comparable salary information that is tailored to our clients’ unique situations as part of our executive search services for nonprofits. We consider a number of factors and consult a variety of resources, some of which are outlined below.

Factors that may influence salary range:

1. Location. The geographic location of a nonprofit organization must be considered when determining the appropriate salary range for a position. For example, East Coast or West Coast regions typically have a higher cost of living and thus offer higher compensation packages than what might be found in the Midwest. In order to attract the best candidates, it is important to know what organizations in your area are paying for similar positions.
2. Sector. There is a salary variance between nonprofit sectors in terms of what they are able to afford for staff salaries. For example, hospital foundations typically provide higher compensation to employees compared to a religious organization depending on their resources.
3. Benefits. Beyond the salary figure alone, the total compensation package must be considered. A lower salary might still be competitive if there are strong benefits or other incentives for employees. These might include generous time off, flexible work schedules, working from home, health insurance options and retirement plans.
4. Relocation. If a new hire is expected to relocate for the position, it is important to take into account what financial resources exist within the organization to assist with those expenses. This can impact the final negotiated salary.

Professional resources to consult:

1. GuideStar. Visit www.guidestar.org for a variety of nonprofit resources. You can look up the 990 reporting forms for comparable nonprofits that include compensation data for the Executive Director based on the previous year. You can also purchase a detailed salary report based on data derived from a comprehensive review of 990s. You will have access to this helpful report through The Moran Company if you choose to partner with us as your retained executive search firm.
2. Local Nonprofit Resource Centers.  Many communities have a university or other nonprofit resource center that conducts salary surveys for the nonprofit community. 
3. Association of Fundraising Professionals (AFP). Visit www.afpnet.org to view resources and find a chapter in your area. You can purchase fundraising compensation reports or network with individuals who can provide insight to fundraising salaries in your area.
4. Community Foundations. If your city has a community foundation, this could be a great place to contact for advice or more information. They work with a variety of donors and nonprofit organizations. They can provide the names of local nonprofits who might have comparable salary information.
5. Job Postings. Check your local listings and nonprofit job boards for similar open positions. Those salary ranges may be advertised and can serve as comparisons. This will also give you an idea of the other opportunities qualified candidates will see.
6. Personal Contacts. Nonprofits are often willing to help each other. Personal connections can open doors to very helpful conversations with staff leadership. You can contact comparable organizations directly about information they can share.

If you partner with The Moran Company for your executive search, we are able to provide you with guidance on everything from salary ranges to position descriptions while uncovering the most qualified candidates with skills that match your needs. We specialize in working only with nonprofit organizations to find the best Executive Directors, CEOs, Vice Presidents, Directors of Development, and more. To learn more, simply contact us for a free 30-minute consultation for your organization.

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© 2016 The Moran Company, “We find great nonprofit executives.” We specialize in searches for nonprofit executive directors, directors of development/fundraising staff, and other top nonprofit leadership. www.morancompany.com