What a 990 says about pay

Last week I said we'd get to what the people at the top are paid — so here it is. A 990 lists the highest-paid staff by name, with their salaries, and it's the one figure in the whole filing that everyone seems to have an opinion about. When you see a big one, the reflex is to judge. Resist that for a second, because a salary on its own tells you almost nothing.

Pay only means something next to the size of the job. Running a $60-million hospital is not the same job as running a $500,000 food pantry, and the numbers bear it out: across the filings, a typical top salary runs under $200,000 at the smallest nonprofits and around $700,000 at the largest. Context flips the same figure completely — a $250,000 salary sits near the top of the range for a small organization, but it's below average for a mid-sized hospital or university. The question is never "is that a lot?" It's "is that a lot for an organization this size, doing this work, compared with its peers?"

So what should you actually watch for? Not a big number — an out-of-line one. Pay that towers over what similar organizations pay. Pay climbing fast while the organization shrinks or cuts programs. A salary that eats an outsized slice of a small budget. Those earn a second look. But the opposite deserves a mention too: underpaying leadership isn't a virtue. Same as last week's overhead trap — an organization that won't pay competitively struggles to keep the people who make it work. Reasonable pay is how good nonprofits hold on to good leaders.

The lens, then: read pay against responsibility and peers, not in a vacuum. A big salary at a big, well-run organization is usually just the going rate; the same salary at a struggling one is a question worth asking. When gleantree flags compensation, it's those out-of-line cases — pay far above the peer group, or spiking while the organization stumbles — not a large number attached to a large job. Next week: the giving itself — who funds whom, and what a 990 reveals about where the money goes.