When it comes to what not-for-profit organizations should pay their top executives, the “instructions” are not always clear or obvious. The directive is that compensation should be “reasonable”, but reasonable may mean different things depending on who you ask. Your board could have an idea for a figure that is convenient for the budget, but would not attract the quality candidate that your organization needs to further its reach. On the other end of the spectrum, your compensation package may be outsized for the type of organization you operate, which risks drawing the ire of regulators and the community you serve.
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Topics:
not-for-profit,
NFP,
executive compensation,
compensation risks,
retain talent,
not-for-profit salaries
Executive compensation can be a consistent point of contention for many not-for-profit organizations. Many find themselves trying hard to strike a balance between:
- Paying compensation that can attract and retain the level of talent needed to help the organization fulfill its mission and purpose, and
- Complying with IRS rules related to paying compensation that is “reasonable”
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Topics:
not-for-profit,
NFP,
executive compensation,
retain talent,
recruitment,
not-for-profit salaries
Not-for-profit organizations will face some critical challenges as the new tax law begins to take effect. The Tax Cuts and Jobs Act (TCJA) had to be paid for in order to be passed, and a result, new taxes were added to offset the costs of the 40 percent reduction in corporate tax rates and 20 percent deduction to owners of pass-through entities.
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Topics:
executive compensation,
Taxes,
Congress,
estate tax,
Tax Reform,
House of Representatives,
senate,
Charitable contribution planning,
not-for-profit tax
Congress took its first steps toward tax reform when both the House and the Senate released versions of their changes to the tax code. The House passed its version of the Tax Cuts and Jobs Act, while the Senate Finance Committee approved its version of a tax reform bill on November 16. Provisions vary significantly between the House and the Senate versions of the tax reform plan, but they share one element in common: they both have provisions that will affect not-for-profit organizations.
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Topics:
executive compensation,
Taxes,
Congress,
estate tax,
Tax Reform,
House of Representatives,
senate,
Charitable contribution planning,
not-for-profit tax
Most professionals think hard about getting a job. Choosing the right outfit. Acing the interview. Negotiating a fair salary and benefits package. But rarely is much thought given to leaving a job until that day draws near. That can cause a wave of trouble for a not-for-profit organization, especially when the founder or long-time executive is ready to walk out the door one last time. Boards and executives who take a proactive approach to saying adiós can ease the transition to new leadership and help ensure stability in their organizations.
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Topics:
not-for-profit,
executive compensation,
exit agreement
Not-for-profits must closely monitor the line between reasonable and excessive compensation. With the increasing IRS scrutiny on compensation levels, not-for-profits must be vigilant to ensure their pay and other transactions to key personnel remain reasonable.
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Topics:
not-for-profit,
executive compensation,
compensation risks
