Archive for September 8th, 2009

Charity Navigator’s $158,000 CEOs

Posted on September 8, 2009. Filed under: Fundraising, Leadership, Non-profits |

Nonprofit CEOs – Are you earning the “average” pay of $158,000?

Charity Navigator’s “Quiz” is really a misleading marketing message.

In the spirit of going back to school Charity Navigator has posted a 12 question quiz on their website, which is pretty easy for those who have taken at least a couple of courses in non-profit managment.

One of their questions however is extremely misleading, and I think the answer they promote as correct is in fact, wrong. On question # 1, they ask how many non-profits are in the USA, and as most of you know, the answer is more than 1.1 million.

So as you can see, Charity Navigator has established that the universe that the quiz is oriented to is the entire non-profit sector.

But, when you get to question 7, which asks what is the compensation for the “average charity’s chief executive officer’s annual compensation,” and the choices are: $58,000, $158,000 and $580,000. If you choose $58,000, thinking that with 1.1 million non-profits, that is probably a good estimate, your answer will be labeled “Incorrect”.

This is because in the quiz, Charity Navigator (without any warning) changes the universe from the “1.1 million non-profits” identified in question #1 to the “the leaders of the top 5400 largest charities in America,” where the average annual compensation is $158,000. This is like taking the average salary of the Fortune 500 CEOs and using it to calculate a typical workers average annual paycheck. The numbers while accurate for the 5400, are misleading if they are supposed to represent the entire non-profit sector.

The quiz is fun, and is fine that it’s a blatant marketing message for Charity Navigator’s view of the world (including that religious charities should be forced to disclose the details of their finances), but my concern is that this is the type of number that can get picked up and bandied about without any context – “The average non-profit CEO earns $158,000, that’s four times what a police officer earns and five times the salary of a new teacher – why should I give my money to those greedy non-profits?”

What do you think?

Should they change the quiz?

Does your CEO earn the “average salary of $158,000?”

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