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Most assume that “nonprofit” means these organizations or their employees cannot make money. But that’s not true!
Nonprofit organizations offer salaries to their employees, from the higher-ups like directors and managers to lower-level employees like assistants, coordinators, and more. Specific regulations influence compensation, whether you’re looking to start a nonprofit or refine your salary structure.
In this article, we will explain salary structures, regulations, and compensation ranges for nonprofit employees, including specific roles and factors influencing their pay.
What does our guide on nonprofit salaries include?
The IRS determines a nonprofit's reasonable compensation as the "value that would ordinarily be paid for services by like enterprises under similar circumstances."
Nonprofits must follow all federal and state wage laws that require employers to pay a minimum wage. The current federal minimum wage rate is $7.25 an hour, but most states have their minimum wage rates. You must pay whichever is higher.
Beyond the minimum wage rate, each state's hourly rates and fixed salaries differ widely.
Nonprofits offer employees perks and benefits in addition to reasonable pay. These include competitive healthcare and retirement plans, flexible work schedules, tuition reimbursement, and/or student loan forgiveness.
What factors influence nonprofit salary ranges?
The salaries of employees in the nonprofit sector are based on several factors, meaning that an executive director position might look different from one organization to another. These go beyond IRS compensation rules and state and federal wage laws.
Understanding these factors is crucial for nonprofit leaders to ensure fair and competitive compensation.
By doing so, tax-exempt organizations can easily hire and retain staff for the long haul, minimizing recruitment and employee training expenses.
Location
Geographic location is an essential factor influencing nonprofit employee salaries.
For example:
A fundraising manager in New York City makes $108,577 annually while in Kansas City the same position makes an average $91,301 annually.
An executive director in Little Rock, Arkansas makes $112,384 annually on average, while an executive director in Newark, New Jersey makes an average of $140,747.
Factors playing into city and state-specific nonprofit compensation
Cost of living: High-cost areas (like San Francisco, NYC, or DC) generally offer higher salaries to offset expenses like housing, transportation, and basic goods. Lower-cost areas offer lower wages, even for similar roles, because daily living is less expensive.
Local funding and philanthropy culture: Areas with robust philanthropic communities or many foundations (like the Northeast or parts of California) often see more funding flowing to nonprofits, which can mean higher salaries. In contrast, nonprofits in rural or less affluent regions may operate on leaner budgets and offer lower compensation.
Urban vs. rural dynamics: Urban nonprofits often face more competition for talent, so they may offer more competitive pay. Rural organizations might pay less but provide more flexibility or other non-monetary benefits.
Regional economic trends: Local unemployment rates, average wages, and the strength of the nonprofit sector in a given area can influence salaries. For example, tech-heavy cities may raise expectations across industries, even nonprofits, for higher compensation due to competitive labor markets.
Proximity to government or policy centers: Cities like Washington, DC, or state capitals often have more policy-oriented or advocacy nonprofits, sometimes with more funding and higher salaries.
Unionization and labor laws: Some states (like California or New York) have stronger labor protections, minimum wage laws, or union presence, which can lift nonprofit salaries. Others with weaker labor protections may not offer the same pay standards.
Organization size
Larger organizations are financially more stable and have a significant pool of funds, which allows them to offer attractive pay and more in-depth nonprofit executive compensation for a CEO or executive director.
Smaller organizations have more limited resources and funding and generally offer a lower average nonprofit salary. This is likely still reasonable compensation, and may come with other benefits, such as flexible working hours and opportunities for professional growth.
Each organization has its own financial resources, funding structures, and organizational needs influencing its compensation levels.
For instance, hospitals have diverse funding sources, such as government funding, individual donations, grants, and more. With significant income, nonprofits in the healthcare field can pay employees higher compensation.
On the other hand, a local animal shelter may have a smaller budget and limited funding resources, which can affect the overall compensation.
Nonprofit organizations typically structure their compensation based on the scope and impact of each role.
For instance, an executive director who oversees staff and events will receive higher compensation than a volunteer head or marketing professional.
Qualifications
Some nonprofit positions demand more experience and higher education for qualified employees. They pay better than entry-level positions (like a grant writer) or require a high school diploma.
For instance, appropriate compensation for an executive in nonprofits is higher than that in the human resources field. Other organizations may rely on independent contractors for things like fundraising events and administrative support to reduce the need to pay overtime and receive benefits for tax purposes.
If specific skills are needed, such as a master's degree, salaries may be higher based on the education required for someone like a marketing manager or accountant. Similar organizations may compete for talent, offering wiggle room for negotiation based on valuable education and experience that can be brought into the organization.
If you're a new organization trying to make sense of how to pay executive roles and other supporting positions, remember that it’s all a balancing act. Nonprofits should offer good salaries at all levels, particularly to employees with good qualifications and experience. This will attract well-qualified candidates, particularly for challenging roles.
Fixed and variable compensations
Not all organizations pay their employees in the same way. Some use fixed salaries, while others rely on variable or hourly pay.
Fixed salaries mean nonprofit employees receive a set amount of money each pay period, irrespective of performance or other factors. Salaried employees in an organization are typically those in more executive or leadership positions.
The decision will impact how a nonprofit approaches payroll taxes and total compensation packages for potential employees across the whole team.
nonprofit Salary
Pros of Fixed Compensation
Cons of Fixed Compensation
Provides employees with financial stability and secure funding for their livelihood (social security benefits, PTO etc.)
Reduces competition and fosters a sense of teamwork
Attracts talented individuals committed to the organization and its mission instead of financial gain
Fixed expenses (monthly compensation) are easier to control and manage while budgeting
Simplifies payroll management
Lack of sufficient motivation for the organization’s employees to perform at a higher level
Limits the ability to reduce costs during downturns
Less flexibility in adjusting salaries based on performance
Variable compensation means that an employee's pay is based on different factors. These cover individual performance, achievement of specific goals, and the organization's financial situation. Many lower-level and part-time positions at nonprofits are paid by the hour, and incentive compensation may exist within other roles.
nonprofit Salary
Pros of Variable Compensation
Cons of Variable Compensation
Boosts motivation by offering financial rewards for good performance
Flexibility to adjust pay based on changing circumstances
Shifts financial risk from organization to employees
Makes budgeting and payroll more complex and less predictable
Deters experienced candidates who prefer financial stability
Leads to unhealthy competition and inequity in the workspace
Average salary of different nonprofit job titles in the USA
Learn more about fair compensation across nonprofit work by taking a look at the averages across the USA. A specific organization may pay differently based on their program expenses and living wage within the area, but many nonprofits approach salaries based on these ranges.
A recent NonprofitPro article spotlighted findings from Career Blazers Nonprofit Search’s 2025 Compensation Report—and the message is clear: nonprofit pay is evolving, and transparency is leading the way.
Key takeaways include:
Salaries are trending up, reflecting a competitive hiring landscape.
Pay transparency is gaining ground—over 25% of the U.S. workforce is now covered by some form of pay transparency law.
Open salary sharing attracts stronger candidates and supports internal trust and performance.
For the first time, new salary data for small nonprofits (with budgets under $2M) are included, giving long-overdue visibility to their compensation realities.
As competition for talent continues, nonprofits are making career development a core part of their compensation strategy. According to the 2025 Compensation Report, 64% of organizations now offer training and professional development opportunities, a noticeable increase from the previous year.
More organizations understand that salary alone isn’t enough to retain people. Nonprofit employees also want to see a future for themselves within the organization, and its a helpful component to the overall compensation package.
3. More in-person work norms can influence salaries
One trend that will continue into 2025 is the growing influence of remote work on nonprofits' approach to salaries. Remote roles are still highly sought after, whether entirely virtual or in a hybrid model.
Idealist reports that even as more positions go remote, the way organizations are setting pay hasn’t quite caught up. They found that 73% of remote jobs are still paid based on the employer’s location, not where the employee lives.
That can be a challenge if you’re trying to attract top talent from areas with lower costs of living, where your salary might not be as competitive. This will continue to shape how nonprofits explore location-based pay adjustments and benefits packages to stay competitive.
Final thoughts on nonprofit salaries
Nonprofits must ensure that their salaries are reasonable to maintain tax-exempt status and comply with state and federal wage laws.
To set fair and competitive salaries, research the nonprofit sector thoroughly. Assess what other nonprofits in your area offer and factor that into the decision-making process. Turn to the labor market to benchmark a reasonable value.
Remember, with a qualified and motivated team, there is no limit to what you can achieve!
Yes, organizations can pay nonprofit employees bonuses provided that they are within a reasonable range. It should align with the nonprofit’s budget and ensure compliance with IRS compensation laws.
The board of directors should approve bonuses to ensure they are in the company's best interest. They should be documented and based on clear and objective criteria, including performance metrics, achieving specific goals, employee extra efforts, etc.
While not always easy to find as public figures, most nonprofit executive directors' salaries are public. Nonprofits that file Form 990 or 990-EZ report the compensation of their highest-paid staff members.
This information is available in public records, allowing you to learn how some nonprofits provide salaries and decide independently. It also helps potential donors understand how nonprofits spend on programs rather than wages.
Nonprofits pay their employees a fixed salary, hourly rate, or variable compensation comprising bonuses and other benefits. They usually rely on donations, grants, program fees, and other funding sources to pay their employees.
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