When we hear "nonprofit," most of us imagine an organization filled with the ultimate do-gooders: those angelic advocates who are willing to sacrifice their own financial gain to serve a noble cause. If you've ever worked for a nonprofit, you know first-hand that every red cent is closely monitored. Nonprofit workers often struggle to make do with scanty office supplies, assistants must request a key to access the copy machine, overnight shipping is frowned upon and employee salaries are negligible. Or are they?
Nonprofit Millionaires
It seems that some nonprofit employees are better compensated than others. We're talking about the CEOs at the helm of these virtuous organizations, as well as those well-read professors and winning coaches at nonprofit universities. These are the folks that many critics are calling the "nonprofit millionaires."

As a matter of fact, many CEOs at the head of the largest nonprofit hospitals, museums and religious organizations earn as much dough as executives who run major for-profit corporations. And the professors and coaches who work for major nonprofit colleges? They often earn even more. (Learn more about these careers in Social Finance Careers: Creating A Better World.)

Saintly Salaries
Surprisingly, executives at the head of leading nonprofit foundations earn as much as $1 million to $4 million a year, according to The Chronicle of Philanthropy. These compensation packages often include salary, bonuses, health insurance and other benefits. For the past 17 years, the Chronicle has released its annual compensation package rankings for the wealthiest U.S. charities and foundations that raise the most donations. The 2008 list included a whopping 325 nonprofit organizations. Also included is a couple top Canadian nonprofit earners.

Top Paid
At the top of the pay list was James Mongan, CEO of Partners HealthCare System, which operates a group of nonprofit hospitals in Boston. Mr. Mongan, who is also a Harvard Medical School professor, brought home some serious bacon in 2008. Partners HealthCare System paid the wealthy professor $3.4 million for his loyal services.

The second on the nonprofit executive salary list was Glenn Lowry, director for the Museum of Modern Art in New York City. Although Lowry earned nearly $700,000 less than Mongan in 2008, he brought home $2.7 million.
Coming in at a close third was Steven Altschuler, who earned $2.4 million as the CEO for the Children's Hospital of Philadelphia.

But nonprofit CEOs aren't the only ones raking in the big bucks - many other nonprofit employees are earning some major moolah, too. For example, there's David Swensen, chief investment officer for Yale University. With a $4.3 million in compensation, Swensen earned even more than top-paid CEO Mongan in 2008.

And let's not forget those well-paid college coaches. (Yep, many private colleges and universities are considered nonprofits, too.) Pete Carroll, the head football coach for the University of Southern California Trojans, scored a winning $4.3 million in 2008, while Mike Krzyzewski, head men's basketball coach at Duke University earned $3.7 million.

Canadian Compensation
In Canada the compensation is very charitable. For example Stephen Toope, President of the University of British Columbia made $523,134 in 2009. In Alberta, Calgary Health Region's former CEO Jack Davis received a C$5.7 million severance and retirement package in late 2008. In 2009, nine workers made more than $350,000 on Alberta Health Services. Not bad for a not-for-profit organization.

Here are a few more nonprofit executives and employees who topped the Chronicle's prestigious 2008 compensation list:

  • David Silvers, Clinical Professor of Dermatology at Columbia University: $3.7 million
  • Zev Rosenwaks, Professor of Obstetrics and Gynecology at Cornell University: $3.3 million
  • James Madara, Vice President of Medical Affairs at University of Chicago: $2.8 million
  • John Powers, President of Stanford Management Co., Stanford University: $2.4 million
  • John Sexton, President of New York University: $1.3 million
  • Lee Bollinger, President of Columbia University: $1.3 million
  • Amy Gutmann, President of University of Pennsylvania: $1.2 million

And your parents told you that you'd never bring home decent salary from a nonprofit!

"Reasonable" Compensation?
Shocked and appalled at these exorbitant executive salaries, some critics believe the IRS should put a cap on the amount of money a nonprofit CEO can earn. As of right now, the IRS simply states that nonprofit CEOs should receive "reasonable compensation."

Obviously, the definition of "reasonable" varies wildly among nonprofits. While some organizations believe $150,000 is perfectly sensible, others seem to think their noble CEOs deserve millions. After all, there's nothing quite like driving your Ferrari home to your 6,000 square foot mansion after a long, hard day of fighting for the cause.

Learn more about nonprofits in Navigating Government And Nonprofit Financial Statements and Deducting Your Donations.

Related Articles
  1. Executive Compensation

    How Restricted Stocks and RSUs Are Taxed

    Many firms pay a portion of their employees’ compensation in the form of restricted stock or restricted stock units.
  2. Your Practice

    How to Save for Retirement Like a Wealthy CEO

    Don't have a CEO's income? You can still employ a millionaire’s saving strategy when it comes to planning for retirement.
  3. Budgeting

    Got a Raise? 7 Smart Things to Do With It

    If you get a raise and spend all of it each month, from a wealth-building perspective you didn’t get a raise at all. Make that extra money work for you.
  4. Mutual Funds & ETFs

    Make Employees Happier with This Simple Tip

    Offering socially responsible options is a good way to increase employees' sense of satisfaction, which can lead to improved morale among other things.
  5. Personal Finance

    Salary Negotiation Strategies That Can Backfire

    While you want the best salary you can get, failing to understand when, how, and why to negotiate may lead to undesirable results.
  6. Entrepreneurship

    Becoming An Insurance Agent

    Few careers match the opportunity for as quick and large a paycheck as does being a life insurance agent.
  7. Your Practice

    How the Advisor Compensation Debate Helps Clients

    The debate over compensating advisors is not likely to be resolved anytime soon, but clients should win with lower fees and better services.
  8. Professionals

    Career Advice: Financial Analyst Vs. Business Analyst

    Understand the key distinctions between a financial analyst and a business analyst, and learn what each career offers in terms of starting pay and job outlook.
  9. Investing Basics

    Start Investing With Only $1,000

    Find out what fees and restrictions need to be considered before investing $1,000.
  10. Professionals

    Internal Advisor Consultant: Job Description & Average Salary

    Learn about the internal advisor consultant position and the national average salary as well as the key skills, education and experience needed.
RELATED FAQS
  1. How does a cost-of-living adjustment (COLA) affect my salary?

    Some companies build salary adjustments into their compensation structures to offset the effects of inflation on their employees. ... Read Full Answer >>
  2. How do mutual fund managers make money?

    Mutual fund managers get base salaries, which vary greatly depending on the size and pedigree of the fund company. They may ... Read Full Answer >>
  3. Does working capital include salaries?

    A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account, ... Read Full Answer >>
  4. Do financial advisors need to meet quotas?

    Most financial advisors are required to meet quotas, particularly if they work for firms that pay base salaries or draws ... Read Full Answer >>
  5. What is the difference between AGI (adjusted gross income) and gross income?

    In the United States, individuals pay taxes based on their adjusted gross income, or AGI, rather than their gross income. ... Read Full Answer >>
  6. Does my employer's matching contribution count towards the maximum I can contribute ...

    Contributions to 401(k) plans come from employee salary deferral and employer match dollars. According to the IRS, employees ... Read Full Answer >>
Hot Definitions
  1. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  2. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  3. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  4. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  5. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
Trading Center