Considering CEO Salary When Choosing a Charity to SupportMay 04
You want to donate to a charity, but you want to make sure that you’re a well-informed donor. So what questions do you ask of a charity before helping out? There are a few obvious choices, which should likely be the first questions you ask. What does the charity do? Who do they help? Are they focused on local, state, or national goals?
These kinds of questions are important, and they help you determine if a charity is one that you’re interested in helping. Once you’ve found charities that align with your own goals and concerns, you should ask some more detailed questions. How do they raise money, and how do they spend it? Who donates to this charity? How do they spend that money?
The last question can encompass a lot of different things, like how much they spend on overhead, including advertising, building maintenance, or salaries. In fact, one piece of information that is worth considering is how much a charity pays their CEO.
Running a charity is often a full time job, and according to the IRS, CEOs should receive “reasonable compensation,” but that’s pretty vague. You want to look at how much a CEO is paid versus how much a charity raises, and how that salary compares to other expenditures by the group. If a charity won’t admit to how much they pay their CEO, you should take that as a warning sign and look elsewhere.
But at the same time, a low paid CEO isn’t necessarily a good thing. A successful charity with a highly paid CEO can likely do more with your money than a less successful charity with a poorly paid CEO. In the end, you need to do the legwork for yourself, and compare different charities to see which pay their CEOs salaries that you’re comfortable supporting.