Nonprofit Pay: Balancing Fairness, Compliance, Public Trust

Government and regulatory partner Marilee Springer and associate Rachel Phillips co-authored an article titled “Nonprofit Pay: Balancing Fairness, Compliance, Public Trust” for the Indiana Lawyer. 

The co-authors explained how the common misconception that nonprofit executives and employees are overpaid misses the mark, noting that nonprofits exist in a tightly regulated legal space that is subject to regulatory review and public scrutiny. Further, nonprofits can often struggle to retain top talent compared to their for-profit counterparts, resulting in a talent gap that can jeopardize an organization’s effectiveness. 

“Nonprofit boards must walk a fine line when setting executive pay,” the co-authors concluded. “Compensation should be high enough to attract and retain talented leaders but not excessive so that the nonprofit’s assets can be dedicated to its charitable mission. Boards are encouraged to use market data, establish clear policies and maintain thorough documentation for every compensation decision. With these guardrails in place, nonprofits can confidently recruit the best leaders, remain compliant with federal regulations and assure donors and the public that their resources are being managed responsibly.”