While there is debate and controversy over the incidence and amount of compensation for board members in the nonprofit sector, the focus is on the largest group of tax-exempt organizations (i.e., the c3s known as charities), as IRS regulations call for compensation to be based on data from comparable organizations.
To find out if director pay is more common in nonprofit organizations that are similar to for-profit companies, compensation data from nonprofits exempt from taxes as c15s – mutual insurance companies or associations – were reviewed.
While these are a very small proportion of the total tax-exempt sector, the proportion of paid directors is higher than for other nonprofits.
These c15s are much smaller than the for-profit companies, most with assets of less than $5 million. The average for the paid directors was a little under $19,000 per year; the highest-paid director received $25,000 per year.
