How much do nonprofit founders or other key leaders deserve to earn in compensation? Or stated differently, how much should they earn in light of their tremendous sacrifices over time, available nonprofit resources, and applicable legal requirements? Founders often receive only modest compensation, sometimes even serving as volunteers, in order to advance the organization’s mission, especially in its early years.
This approach may help launch the nonprofit successfully, but extended use of this strategy may lead to employment-related challenges in the long run. For example, issues may arise when the under-compensated founder approaches retirement age but cannot afford to do so, or when the leader later seeks much more generous compensation. Additional problems may develop when a pivotal leadership position must be filled by a new candidate who expects market-rate compensation.
How can nonprofit leaders best address founder compensation as well as plan for future developments, while honoring founders’ generosity, tenacity, and motivation? Some options may include better budgeting and financial forecasting, retirement plan establishment, and executive compensation due diligence. These tools and other valuable tips are addressed in an insightful blog article published by CapinCrouse, a national full-service accounting and advisory firm exclusively serving nonprofit organizations. CapinCrouse, a division of Carr Riggs & Ingram, assists nonprofits with employment compensation studies and related advisory services. Through these recommended measures for executive compensation, particularly focusing on founders, nonprofit leaders can strategically position their organizations for optimal flourishing.
