Once you’ve chosen when to hire an Executive Director, what to look for in an Executive Director, and how to hire an Executive Director, you’re well on your way to hiring an Executive Director for your company.
Your next step involves asking some insightful interview questions and choosing a few final candidates for the position. Then, it’s time to decide what to pay an Executive Director.
The salary of an Executive Director varies widely between nonprofit organizations. Here are five factors that can influence what to pay an Executive Director.
How to Determine a Nonprofit Executive Director Salary
1. Organization and Executive Director performance
For many nonprofits, what to pay an Executive Director depends on how well the organization and the ED are doing. Some nonprofits base the Nonprofit Executive Director’s salary entirely on results – the more successful the organization is, the more the ED earns for the year. Other nonprofits have a set yearly nonprofit executive director salary for the ED, but offer him or her a bonus based on how well they adhere to their job requirements. Ideally, this method gives the Executive Director an incentive to help the organization grow.
2. Organization size
The size of your nonprofit is one of the biggest factors affecting Executive Director pay. The ED of a small to mid-size nonprofit tends to make less than the ED of a large international organization. This is mostly due to the nonprofit’s available resources and the role of the Executive Director.
3. Other types of compensation
Pay is not limited to salary for many executives. Some organizations give executives benefits such as insurance, a car, housing allowance, or other fringe benefits. When calculating what to pay an Executive Director, remember to include the value of these benefits in your final total.
An Executive Director working for a nonprofit in a remote location tends to earn less than an ED working for an organization located in a large city. Because large cities tend to have a higher-than-average cost of living, salaries for these jobs tend to be higher in order to compensate. Likewise, since the cost of living is lower in a remote area, salaries in these areas are not quite as high.
5. Skills and experience
If an Executive Director possesses an uncommon skill that is relevant to their position, he or she tends to earn a higher salary. Because high-level skills can be hard to find, an Executive Director with these skills is valuable to your company. Similarly, high-level experience in a relevant field tends to make an ED more valuable. Because candidates with more skills and experience have more to offer your organization, they are generally compensated more for their efforts.
You might be interested in these other posts about hiring an Executive Director:
– 10 Ways To Grow As A Nonprofit Leader
– Nonprofit Executive Search Firm
– How to Hire an Executive Director
– 5 Specific Executive Director Interview Questions
Y Scouts is a purpose-based, performance-proven leadership search and development firm focused on transforming how people and organizations connect to work that matters. When you’re ready to hire a new leader, Contact Y Scouts. If you are looking for your next leadership role within a purpose-driven, performance-focused organization, please join the Y Scouts Leadership Community.
Get a free consultation for your Executive Director search. Please fill out the form below.
Find A Leader
Y Scouts partnered with Year Up to understand our organization and our goals for new leadership. The Y Scouts approach was exceptionally effective, delivering a slate of candidates who embodied the essential values and experience we wanted. Our outcome was a dynamic and experienced leader who truly embodies our mission. As we continue to expand across the country, we consider Y Scouts a go-to partner in future searches.