NoNprofit CompeNsatioN 2011 survey Supported by:

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1 11 Nonprofit Compensation Survey Supported by:

2 11 Nonprofit Compensation Survey Aaron Brenner Drive Suite 300 Memphis,Tennessee Fax: East Main Street, Suite 2C Tupelo, Mississippi Fax: Dear survey participant, Thank you for your participation in Watkins Uiberall s 11 Nonprofit Compensation Survey. We have enclosed the results of the surveys received from nonprofit organizations across the State of Tennessee. In an effort to present the information in a manner that can be easily interpreted and utilized, we have provided the following: A description of the survey respondents including geography, field of work and budget size. Summaries and graphical presentation of the reported data, including the areas of staff, boards and volunteers, compensation and benefits. Cross-tabulated data to compare many of the graphs to organizations budget size. Excerpts of compensation data comparing the Memphis, Nashville and Chattanooga Metro Statistical Areas (MSAs) with national averages from the 10 GuideStar National Nonprofit Compensation Report, based on 08 data. We would like to extend a special thanks to our supporting organizations: Alliance for Nonprofit Excellence in Memphis, Center for Nonprofit Management in Nashville, and the United Way of Greater Chattanooga s Center for Nonprofits. Without their input and cooperation, we would not have been able to gather the volume of data necessary to produce a meaningful survey. If you are not a member of one of these supporting organizations, we invite you to learn more about their services and offerings as described in the organizational profiles following the survey results. We hope you find this information useful to your organization and appreciate your participation in our survey. If you have any suggestions regarding the content for future surveys or any questions regarding the information presented, please contact Daniel Moore, CPA, Audit Manager of Nonprofit Services, at or dmoore@wucpas.com. For more information about Watkins Uiberall, please see our Firm Profile following the survey results. You can also visit our website at Thanks again for your participation,

3 2 11 Nonprofit Compensation Survey Executive Summary In the last four years of the nation s recession, nonprofits across the country have faced severe funding declines and soaring demands for services. Private and public dollars for nonprofit programs have not been able to keep up with community needs, especially for basic safety net services like housing, food, and health care. Most nonprofits are struggling to maintain programs, cover their increased costs, and avoid layoffs and salary cuts. Cultivating and supporting a high-quality workforce has become even more of a challenge in the recession. Competitive salaries and benefits are essential for recruiting and retaining talented, committed employees, but they are frequently sacrificed to address financial instability. Maintaining core services in the face of growing demands can mean sacrificing raises, bonuses, and filling vacancies, not to mention mentorship, professional development, and staff morale. Effective nonprofit leaders know that people are their most valuable and vulnerable resource. The Nonprofit Compensation Survey is designed to help leaders understand regional compensation trends and benchmark their organizations compensation packages so that they can preserve this resource. By understanding regional compensation patterns and issues, nonprofit leaders can work to prioritize staffing goals and design compensation plans that support and motivate their employees, and as a result, maximize their community impact. The survey includes a comparative analysis of salary and benefits in nonprofit organizations based in Tennessee and in neighboring counties of Arkansas, Mississippi, and Georgia. It is aimed at helping nonprofits create new positions, restructure staffing plans, and conduct strategic and business planning. It is also intended to be of value to Boards in reviewing compensation practices; nonprofit professionals and students planning their careers; and funders, government officials and support organizations that wish to know more about compensation in the organizations and programs they support. Participating organizations are each served by regional nonprofit management support centers located in three metropolitan regions of Tennessee: Memphis (Alliance for Nonprofit Excellence), Nashville (Center for Nonprofit Management) and Chattanooga (United Way of Greater Chattanooga s Center for Nonprofits). Leaders of 251 organizations participated in the survey. Participating organizations represent more than 30 fields of work, are urban and rural, and range in annual budget size from less than to more than. Key findings from the survey include: The median salary range reported for executive directors/ceos is between $50,000 and $75,000 per year. The median annual salary range for chief executives at small organizations (up to $250,000 in gross annual revenues) is $30,000 to $49,000 per year. The median salary range for chief executives of medium-sized organizations ($250,000 to $5 million in gross annual revenues) is $50,000 to $75,000 per year, and the median salary range for chief executives of large organizations (gross annual revenues of more than $5 million) is more than $150,000 per year. 76.5% of small organizations have a female chief executive, while 62.1% of medium-sized organizations and 25.5% of large organizations have a female chief executive. 40% of female-led organizations report chief executive director salaries higher than the median range of $50,000 to $75,000 per year, compared with 51.1% of all participating organizations. Disparities are highest in the upper salary ranges, with 15.3% of female-led organizations reporting executive salaries between $101,000 and $150,000 per year and 6.7% reporting executive director salaries of more than $150,000, compared to.1% and 11.3%, respectively, for all participating organizations. Healthcare/medical organizations are more likely to have higher chief executive salaries than participants in general: 50% of healthcare/medical organizations report that their chief executives are paid more than per year, compared to 32% of all participants, and only 3.6% report that their chief executives are paid less than $50,000 per year, compared to 18.4% of all participants. 84% of participants say their organizations have not decreased salaries since the recession began, while 16% report decreasing salaries as a result of the recession. The likelihood that a participating organization has had to cut salaries as a result of the recession is directly correlated with size..5% of small organizations have decreased salaries as a result of the recession, along with 15.8% of medium-sized organizations and 13.5% of large organizations. Almost one third (30.7%) of participants do not anticipate giving raises in 11, down from 37% last year. 71.1% of small organizations, 24.1% of medium-sized organizations, and 17.3% of large organizations won t give raises in % of participants provide an employee bonus program. 11.1% of small organizations, 32.9% of medium-sized organizations, and 46.2% of large organizations offer bonuses. The extent to which volunteers provide organizational labor corresponds with organizational size. 43.5% of small organizations report that at least 41% of labor is provided by volunteers, compared to only 15% of medium-sized organizations and 4% of large organizations. 35.6% of small organizations provide health insurance coverage to employees, compared to 84.5% of medium-sized organizations and 100% of large organizations. 68.1% of participants provide dental insurance coverage to employees. 25% of small organizations report providing dental insurance coverage to employees, compared to 72.7% of mediumsized organizations and 93.6% of large organizations. 46.1% of participants provide vision insurance coverage to employees. 15.9% of small organizations provide vision insurance coverage to employees, compared to 45.9% of medium-sized organizations and 73.5% of large organizations. Participants likelihood of providing retirement plans is correlated with organizational size: 13.3% of small organizations offer a

4 11 Nonprofit Compensation Survey 3 retirement savings program to employees, compared to 64.7% of medium-sized organizations and 100% of large organizations. 44.7% of participants provide combined paid time off (PTO). The median range of combined days off is six to ten days per year for employees who have been employed by the organization for up to one year, eleven to twenty days for those who have been employed by the organization for one to five years, and more than twenty days per year by those who have been employed more than five years. The median range of vacation days is one to five days for employees who have been employed for up to one year, six to ten days for those who have been employed between one and five years, eleven to twenty days for those who have been employed between five and ten years, and more than twenty days for those who have been employed at least ten years. The median range of sick days is one to five days for employees who have been employed for up to one year, and eleven to twenty days for those who have been employed at least one year. Methodology The 11 Nonprofit Compensation Survey was developed and administered in July 11. Two hundred ninety-one organizations participated in this year s survey, and 286 organizations completed the entire survey. The survey included 41 multiple-choice questions related to organizational size, staffing, and compensation. It was distributed electronically to nonprofit leaders whose organizations are located in the State of Tennessee and in neighboring counties of Arkansas, Mississippi and Georgia. One representative of each organization participated in the survey, typically the Executive Director or Chief Executive Officer. Introduction Welcome to the 11 Nonprofit Compensation Survey. This study was designed to collect and share information about nonprofit salaries and benefits in the state of Tennessee and neighboring counties. Compiled by accounting firm Watkins Uiberall, in partnership with three regional nonprofit support centers, the study provides a detailed look at compensation in the state s nonprofit sector. It can be used for benchmarking salaries, tracking compensation trends and patterns, and understanding the many challenges facing regional nonprofits in meeting their workforce needs. Supporting and investing in human resources has always been one of the most important strategies in the nonprofit sector. Since the recession hit, the struggle to maintain the size and quality of its workforce has intensified, as many organizations have had to cut programs, services, staff, and salaries. Now, sector leaders and supporters must pay special attention to how salaries and benefits can best be managed to attract and preserve its most important asset. We invite you to explore this report to learn more about compensation in our nonprofit community, and we welcome your feedback and questions.

5 4 11 Nonprofit Compensation Survey Participant Profile Service Region Survey participants are located in the service areas of participating nonprofit support centers representing counties across Tennessee along with neighboring counties in Arkansas, Mississippi and Georgia. Survey Participants by Region 27.6% 31.5% Geography 286 organizations responded to the survey including: 90 organizations (31.5%) from the Memphis metro region, served by the Alliance for Nonprofit Excellence 117 organizations (40.9%) from the Nashville metro region, served by the Center for Nonprofit Management 79 organizations (27.6%) from the Chattanooga region, served by the United Way of Greater Chattanooga s Center for Nonprofits Chattanooga Nashville Memphis 40.9% Counties Served by Survey Participants TN 27.6% 29.6% 26.8% 53.2% 26.4% 33.6% 31.2% AR 9.2%.0% 44.0% 22.8% 12.8% 12.8% 12.8% 13.2% 16.0% 18.0% 14.0% 8.0% 13.2% 10.0% MS 8.8% Counties Served by Supporting Organizations Alliance for Nonprofit Excellence Center for Nonprofit Management United Way of Greater Chattanooga s Center for Nonprofits 6.4% 6.4% 6.4% GA The percentages above reflect survey participant responses to question #12 of the survey, In what counties do you provide services?

6 6.8% Chattanooga 18.2% 6.5% 8.2% 9.6% 32.5% 6.8% 11.6% Nashville 12.3% 11 Nonprofit Compensation Survey 13.7% Memphis 19.5% 6.5% 6.8% 6.5%29.9% 8.2% 6.8% 48.8% 6.8% 5.9% 14.4% 14.0% 12.3% 21.3% Participant Profile 12.7% Chattanooga Field of Work Survey participants Nashvillerepresent more than 30 different fields of work. Top fields represented include human services (.6%), healthcare/ Memphis medicine (13%), and arts and culture (10.1%). 21.3% Field of Work Advocacy 9.7% Arts/culture 10.1% Children/youth 9.2% Early childhood 3.4% Economic development 4.6% Education/training 4.2% Higher education 2.1% Adult education 1.3% 2.9% Elementary/secondary education Environment/conservation 2.9% Healthcare/medical 13.0% Housing 6.3% Human services/social welfare.6% Years inliteracy Operation 0.8% Mental health 1.7% Research/development 0.0% Senior services 1.3% 3 2.8% Supporting organization(s) 2.9% Veteran affairs 0.4% % Youth services 2.5% Other 21.2% 6 10 Years in Operation 11.8% 29.9% Years in Operation 48.8% Chattanooga Most participants are well-established organizations. Almost 80 percent have been operating Nashville for at least eleven years. Of these, 30.1% have been in operation for between 26 and 50 years, and 19.7% have Memphis been in operation for at least 50 years. Un 6 11 Advocacy 9.7% Arts/culture 10.1% Public Funding 48.8% Children/youth 9.2% For almost half of participants (49.9%), government funding Early childhood 3.4% Economic development 4.6% comprises 10% or less of their total annual budget. For 34.5% of Education/training 4.2% participants, government between 11% and 60% Higherfunding education represents 2.1% Adult education 1.3% of their annual budget. Government funding makes up more than 2.9% Elementary/secondary education Advocacy 60% of the annual budget for 15.6% of respondents. 9.7% Environment/conservation 2.9% Arts/culture 10.1% Healthcare/medical 13.0% Children/youth 9.2% Years in Operation Housing % 30.1% Early childhood 3.4% Human services/social welfare.6% Economic development 4.6% Literacy 0.8% % 2.8% Education/training 4.2% Mental health 1.7% education Higher 2.1% Research/development 0.0% % 19.7% Adult education 1.3% Senior services 1.3% Annual Gross Revenues 2.9% Elementary/secondary education Supporting organization(s) 2.9% 6 10 Environment/conservation 2.9% 11.8% Veteran affairs 0.4% 9.9% Healthcare/medical 13.0% Youth services 2.5% Housing % 30.1% $100,00 $249,999 Other 21.2% 12.3% Human services/social welfare.6% Literacy 0.8% $999, % 30.1% Mental health 1.7% $1 million $4,9 million 31.8% Research/development 0.0% % Senior services 1.3% 6.8% Supporting organization(s) 2.9% Public Funding 5.1% Veteran affairs 0.4% Youth services 2.5% $25 million $100 million 2.1% Annual Gross Revenues Other 21.2% Organization Annual Gross 0% 1.0% 37.4% Budget Size Revenue 9.9% 1-10% 12.5% $100,00 $249, % 11 - % 10.3% $999, % 21-40% 13.2% $4,9 million 31.8% % 2.1% $100,00 $249, % $999, % 61-80% 9.9% % 12.3% 28.4% $4,9 million 31.8% 6.8% 5.1% 2.1% % 0% 9.6% 1-10% 6.0% 11 - % % 12.5% % % 13.2% 41-60% $25 million 11.0% 61-80% 9.6% 6.0% % 1.0% Annual Gross Revenues 6.8% 50 Ov $5 $9. Annual Gross Reve $5 $9. Organization Budge

7 Nonprofit Compensation Survey Participant Profile Gross Revenues Participants represent a wide range of organizational budget sizes. 48.5% have less than $1 million in gross annual revenues, 42.5% have between $1 million and $10 million in gross annual revenues, and 9% have more than $10 million in gross annual revenues. In this survey, organizations are classified as follows: Small: under $250,000 in gross annual revenues Medium-sized: between $250,000 and $5 million in gross annual revenues Large: more than $5 million in gross annual revenues Number of Employees Full-time Staff More than half of survey participants (51.6%) have fewer than 10 full-time employees. 32.5% have between ten and 50 full-time employees, and 15.9% have more than 50 full-time employees. Staff size is closely related to budget size. 98.1% of small organizations have fewer than ten full-time staff. 52.5% of medium-sized organizations have fewer than ten full-time staff. Only 3.6% of large organizations have fewer than ten full-time employees, while 65.5% of large organizations have more than 50 full-time employees. Gross Revenues $100,00 $249,999 $999,999 $4,9 million Number of Employees (full-time equivalents) % % % % % % % Number of Part-time Employees 6.3% 12.2% 30.0% 32.4% 10.1% 7.3% 1.4% 0.3% Part-time Staff 70% of participants have five or fewer part-time employees. 17% have between six and part-time employees, and 13% have more than part-time employees. Hourly Staff For 54.5% of participants, hourly wage workers comprise 0 to % of their workforce. Hourly workers make up between 21% and 60% of the workforce for 27.0% of participants. For 18.5%, hourly workers comprise at least 61% of their workforce. Number of Hourly Employees % % % 13.0% 53.5% 0% 19.8% 1-10% 24.6% 11 - % 21-40% 41-60% 61-80% % 10.1% 11.5% 15.5% 11.5% 7.0% Organization Budget Size

8 11 Nonprofit Compensation Survey 7 Staffing and Salaries The tables on page 12 provide comparative salary data for key positions at participating nonprofits. A wide variety of factors affect salary levels, including organizational size, field of work, service delivery model, and revenue structure. When comparing an organization s salaries to this data, survey composition should be kept in mind: the majority of participating organizations are well-established urban nonprofits with less than $1 million in annual revenues. Nonprofits in urban areas and those that have been operating longer tend to pay higher salaries than rural organizations and those that were more recently established. Smaller organizations tend to have lower salaries than larger ones. Executive Salary The median salary range reported for executive directors/chief executive officers is between $50,000 and $75,000 per year. 29.9% of respondents report executive salaries in this range. Half of participants (51.5%) report higher executive director salaries and 18.6% report lower executive director salaries than the median range. Chief Executive Officer/Executive Director $30K $150K Organization Budget Size Chief Executive Salary and Organizational Size Chief executive salaries are correlated with organizational size as measured by gross annual revenues. The median annual salary range for chief executives at small organizations is $30,000 to $49,000 per year. 26.2% of small organizations pay their executive director/ceo less than $30,000 per year. The median salary range for executive directors of medium-sized organizations is $50,000 to $75,000, and the median salary range for executive directors of large organizations is more than $150,000. directors or chief executive officers than medium-sized or large organizations. 76.5% of small organizations have a female chief executive, while 62.1% of medium-sized organizations and 25.5% of large organizations have a female chief executive. Nationally, women hold 57% of the chief executive positions at organizations with budgets of $1 million or less but only 38% of the top positions at organizations with budgets of more than $1 million and 16% of those at organizations with budgets of more than $50 million. Chief Executive Officer/Executive Director Male 42.3% Female 57.7% Organization Budget Size Median executive director salaries are somewhat lower for organizations led by female executive directors. 35.3% of female-led organizations report chief executive salaries in the median $50,000 to $75,000 range. 40% of female-led organizations report executive director salaries higher than the median range, compared with 51.1% of all participating organizations. Disparities are highest in the upper salary ranges, with 15.3% of female-led organizations reporting executive director salaries between $101,000 and $150,000 per year and 6.7% reporting executive director salaries of more than $150,000, compared to.1% and 11.3%, respectively, for all organizations. Nationally the gender gap among nonprofit chief executives is decreasing for most sizes of organizations. The notable exception is organizations in the $1 million to $5 million range, where the gap has actually increased in the last decade. Chief Executive Salary and Gender 57.7% of participants are led by a female executive director or chief executive officer and 42.3% are led by a male executive. Nationally, women are chief executives of nearly 47% of the nation s charities. Small organizations are more likely to have female chief executive

9 Nonprofit Compensation Survey Staffing and Salaries Chief Executive Salary and Education Level Participants were asked about the highest education level attained by their executive director or chief executive officer. More than 95% of participants say their chief executive has at least an undergraduate degree. 43.5% of participants report their chief executive has a graduate degree. There does not appear to be a strong correlation between the size of an organization and the education level of its chief executive. In small organizations, 50% of executive directors and chief executive officers have an undergraduate degree as their highest education level and 39.6% have a graduate degree. 36.2% of executives in mediumsized organizations completed an undergraduate degree as their highest education level and 47.1% have a graduate degree. In large organizations, 28.3% completed an undergraduate degree as their highest level and 39.6% have a graduate degree. Chief executives with graduate education make somewhat higher salaries than their peers without graduate degrees. Among participating organizations, 86% of chief executives with a graduate degree make more than $50,000 per year and 40% make more than per year. 80% of all chief executives make more than $50,000 per year and 32% make more than per year. Chief Executive Salary and Field of Work Several trends are notable with respect to chief executive salaries and field of work. First, healthcare/medical organizations are more likely to have higher chief executive salaries than participants in general: 50% of healthcare/medical organizations report that their chief executives are paid more than per year, compared to 32% of all participants, and only 3.6% report that their chief executives are paid less than $50,000 per year, compared to 18.4% of all participants. Second, human services/social welfare organizations are more likely to have lower chief executive salaries than participants in general: 23.9% make less than $50,000 per year and 23.9% make more than per year. Arts organizations report more of a variation in chief executive salaries, perhaps because of their broad range of organizational sizes: 38.1% pay their chief executives more than per year and 23.8% pay them less than $50,000 per year. Salary Determination Participants were asked how salaries are determined in their organizations. The top methods reported for determining salaries are surveying national and/or local salaries (68.4%) and talking with other organizations about salaries (42.5%). Chief Executive Salary and Education Level Salary Determination High school 4.7% Review national or local salary surveys 68.4% graduate degree 37.1% Talk to other organizations 42.5% Graduate degree 43.5% Review of other organizations' 990's 17.8% Post graduate 14.7% No outside input obtained 18.2% Salary Ranges Graduate Degree Post Graduate $30K 4 0 $30K - $49K 14 1 $50K - $75K $76K - $100K 23 7 $101K - $150K 30 8 $150K Salary Increases Participants were asked how salary increases are determined in their organizations. 66.2% of participants say that salary increases are merit based. 32.3% adjust salaries with cost of living increases. 11.3% say their organizations give automatic annual salary increases. Salary Increases Automatic annual 11.3% Cost of living 32.3% Merit based 66.2% N/A 16.5% Organization Budget Size

10 Nonprofit Compensation Survey 9 Staffing and Salaries Effect of Recession on Salaries 84% of participants say their organizations have not decreased salaries since the recession began, while 16% report decreasing salaries as a result of the recession. (It is likely that some organizations reduced overall labor expenses by eliminating positions or freezing vacancies rather than cutting salaries.) The likelihood that a participating organization has had to cut salaries as a result of the recession is directly correlated with size..5% of small organizations have decreased salaries as a result of the recession, along with 15.8% of medium-sized organizations and 13.5% of large organizations. Staff Salary Decreases (since recession began) Yes 16.0% 11 Staff Size Change Expectations More than half (58.3%) of participants expect their staff size to remain the same in % expect to increase staff and 8.2% expect to make cuts in staff size. Last year 60% of participants indicated their staff size would stay the same, with 30% planning to increase and 6.5% planning to decrease staff. Nationally, there is some evidence that the extensive layoffs of the recession s first few years have leveled off. The Alliance for Nonprofit Excellence s recent study of Mid-South nonprofits and the recession indicated that many organizations are prioritizing staff investments as a critical strategy for financial stability and mission accomplishment. 19.6% of small organizations say they will increase staff size in the coming year, compared to 37.1% of medium-sized organizations and 33% of large organizations. 11 Staff Size Change Expectations Remain the same 58.3% No 84.0% Decrease 8.2% 11 Salary Change Expectations Almost one third (30.7%) of participants do not anticipate giving raises in 11, down from 37% last year. 63.3% say that they will give raises of between 1% and 4% in 11, up from last year s 55%. 6% will give raises of at least 5%. The likelihood that a participating organization will not issue raises in the coming year is directly correlated with organizational size. 71.1% of small organizations say they will not issue raises in 11, and % will give raises of only 1% to 2%. Only 24.1% of medium-sized organizations won t give raises in 11, and 28.9% will give raises of 1% to 2%. 17.3% of large organizations won t give raises in 11, and 30.8% will give raises of 1% to 2%. Increase Employee Bonuses 31.6% of participants offer a bonus program to employees. Of these, 64.3% offer the program to all employees, 34.5% offer bonuses to the executive director or CEO only, and.2% give bonuses only to the senior management team. 11.1% of small organizations, 32.9% of medium-sized organizations, 46.2% of large organizations offer bonus programs. Bonus Program Offered 33.5% 11 Salary Change Expectations Yes 31.6% No raises will be issued in % 1 2% 27.7% No 68.4% 3 4% 35.6% 5 6% 3.8% Staff Eligible for Bonuses 7 10% 10% 1.5% 0.7% CEO/Executive Director Only 34.5% Change in Staff Senior Management.2% All Employees 64.3% Organization Budget Size

11 Nonprofit Compensation Survey Staffing and Salaries Independent Contractors More than three quarters (78.1%) of participants engage fewer than five independent contractors per year. 10.9% engage between five and ten independent contractors each year, and 11% engage at least eleven independent contractors each year. The top services provided by independent contractors to participant organizations include bookkeeping (57.7%), marketing (41.6%), grant writing (28.5%), and fund raising (24.1%). 93.3% of small organizations engage five or fewer independent contractors, compared with 79% of medium-sized organizations and 59.6% of large organizations. 8.6% of medium-sized organization and 19.1% of large organizations engage more than 15 independent contractors. 66.7% of participants say that the number of independent contractors engaged by their organizations has not changed as a result of the recession. 18.4% say they have reduced their use of independent contractors since the recession began. For some organizations, the use of contractors enables them to maintain service levels by cutting costs: 14.9% have increased their use of independent contractors since the recession began. Number of Independent Contractors Less than % More than % 10.9% 9.0% Volunteers Participants were asked what portion of their organization s labor hours is provided by unpaid volunteers. 41.4% report that between 1% and 10% of their labor hours are provided by volunteers, 37.3% say that between 11% and 60% of labor hours are provided by volunteers, and 10.3% say that more than 60% of labor hours are provided by volunteers. The extent to which volunteers are used to provide organizational labor corresponds with organizational size. 43.5% of small organizations report that at least 41% of labor is provided by volunteers, compared to only 15% of medium-sized organizations and 4% of large organizations. More than half (52.7%) of participants report that their use of volunteers has not changed over the last 12 months. 37.4% say they have increased volunteers over the last 12 months, while 9.9% have decreased volunteer involvement. Labor Hours Provided by Volunteers 1-10% 11 - % 21-40% 41-60% 61-80% % 0% 11.0% 7.2% 4.9% 5.4% 12.6% 17.5% 41.4% Organization Budget Size Contractor Services Change in Volunteer Involvement Bookkeeping 57.7% 52.7% Fund raising 24.1% Increase 37.4% Grant writing 28.5% Decrease Remain the same Marketing 41.6% 9.9% Change in Contracted Services 14.9% Increased Decreased 18.4% Remained the same 66.7%

12 Nonprofit Compensation Survey 11 Staffing and Salaries Boards of Directors Nonprofit Boards of Directors are critical to ensuring organizational resources are sufficient and well-managed during tough economic times. They also fulfill an essential role in planning, supporting staff, fundraising, and enhancing public image. Many nonprofits are struggling to maintain adequate, well-functioning Boards in today s operating climate, when the demands on Board members are more intense. 23.3% of participants have between one and ten Board members. 39.7% of participants have between 11 and Board members, and 37% have more than Board members. Nonprofits with large budgets are more likely to have larger Boards. Among small organizations, 51.9% have one to ten Board members, 30.7% have eleven to Board members, and 17.3% have more than 21 Board members. Among medium-sized organizations, 19.1% have one to ten Board members, 43.8% have eleven to Board members, and 37.1% have at least 21 Board members. Among large organizations, 11.1% have one to ten Board members, 33.4% have eleven to Board members, and 55.6% have at least 21 Board members. Number of Board Members National Comparisons National comparative salary data (shown on page 13) is drawn from the 10 nonprofit compensation research conducted by Guidestar based on 08 data. Based on Guidestar s research, the larger the organization, the larger the increases in compensation. For example, CEOs at organizations with budgets between $500 thousand and $1 million saw a median increase of 3.8% from 07 to 08, whereas those at organizations with budgets of greater than $50 million had a median increase of 5.1%. Percent increases at all sizes of organizations were generally higher in 08 than they were in 07. Average nonprofit executive salary data by field of operation and budget size is given for the Memphis, Nashville and Chattanooga metropolitan statistical areas. For organizations in most budget size and field categories, executive salaries in Memphis and Nashvillearea organizations are at least as high as national averages, although this tends to be less true with the largest organizations. This is likely due to the fact that neither region has a large number of very large nonprofits or those with a national scope and/or service area. all Median Compensation for Largest MSAs (08) % % % % % More than % Organization Budget Size Metropolitan Statistical Area Median Salary Washington, DC-MD-VA-WV $125,052 New York, NY $113,945 Boston, MA-NH $98,094 Los Angeles-Long Beach, CA $95,835 Chicago, IL $94,000 Philadelphia, PA-NJ $92,868 San Francisco, CA $92,417 Baltimore, MD $92,213 San Diego, CA $90,549 Detroit, MI $87,410 Minneapolis-St. Paul, MN-WI $86,493 Dallas, TX $86,2 Phoenix-Mesa, AZ $85,438 Miami, FL $85,111 Atlanta, GA $85,000 Seattle-Bellevue-Everett, WA $84,373 Houston, TX $83,853 Tampa-St. Petersburg-Clearwater, FL $82,248 St. Louis, MO-IL $82,123 Riverside-San Bernandino, CA $82,007 Source: 10 GuideStar Compensation Report

13 12 11 Nonprofit Compensation Survey Compensation Chief Executive Officer/Executive Director Chief Financial Officer/Finance Director Accounting Manager/Controller $30K $150K $30K $150K $30K $150K Program Director(s) (average) Development Director Events Coordinator $30K $150K $30K $150K $30K $150K Grant Writer Director of Communications/Public Relations Case Manager/Social Worker $30K $150K $30K $150K $30K $150K Volunteer Coordinator Information Services/IT Manager Administrative or Executive Assistant $30K $150K $30K $150K $30K $150K Organization Budget Size

14 11 Nonprofit Compensation Survey 13 Compensation Organizations with Annual Revenue $500,000 or Less (based on 08 data) Organization Type Position Memphis, TN-AR-MS Nashville, TN Chattanooga, TN-GA Tennessee National Arts, Culture and Humanities CEO/Executive Director $32,480 $42,559 $48,490 $44,882 $45,155 Education CEO/Executive Director $65,575 $44,990 N/A $47,212 $50,676 Health General and Rehabilitative CEO/Executive Director $62,017 N/A N/A $47,972 $57,005 Human Services CEO/Executive Director $43,514 $46,399 $46,075 $41,564 $45,946 Religion CEO/Executive Director $53,495 $50,958 $48,019 $55,439 $50,347 Organizations with Annual Revenue Between $500,000 and $1 Million (based on 08 data) Organization Type Position Memphis, TN-AR-MS Nashville, TN Chattanooga, TN-GA Tennessee National Arts, Culture and Humanities CEO/Executive Director $68,123 N/A N/A $60,948 $67,394 Education CEO/Executive Director $73,7 $80,531 N/A $70,085 $71,755 Health General and Rehabilitative CEO/Executive Director N/A N/A N/A $69,257 $84,424 Human Services CEO/Executive Director $69,810 $54,631 N/A $63,377 $64,474 Religion CEO/Executive Director N/A N/A N/A $92,906 $71,893 Top Finance Position N/A N/A N/A $67,829 $49,530 Organizations with Annual Revenue Between $1 Million and $5 Million (based on 08 data) Organization Type Position Memphis, TN-AR-MS Nashville, TN Chattanooga, TN-GA Tennessee National Arts, Culture and Humanities CEO/Executive Director $112,064 $115,367 $88,412 $108,469 $106,194 Education CEO/Executive Director $88,191 $123,043 $115,772 $104,629 $106,471 Top Development Position N/A N/A N/A $68,1 $76,150 Top Finance Position N/A $72,092 N/A $64,855 $75,862 Health General and Rehabilitative CEO/Executive Director $97,283 $102,521 N/A $105,461 $122,6 Human Services CEO/Executive Director $86,274 $100,383 $69,549 $83,422 $88,560 Top Business Position N/A N/A N/A $60,813 $63,527 Top Finance Position N/A $73,610 N/A $59,174 $69,008 Top Program Position N/A N/A N/A $61,850 $66,130 Religion CEO/Executive Director N/A $86,119 $88,781 $56,968 $96,156 Organizations with Annual Revenue Greater than $5 Million (based on 08 data) Organization Type Position Memphis, TN-AR-MS Nashville, TN Chattanooga, TN-GA Tennessee National Arts, Culture and Humanities CEO/Executive Director N/A $223,225 N/A $6,094 $256,583 Education CEO/Executive Director $198,607 $227,467 $7,913 $239,246 $246,987 Top Development Position $113,893 $108,497 N/A $94,849 $137,074 Top Financial Position $115,997 $116,459 N/A $106,164 $149,290 Health General and Rehabilitative CEO/Executive Director $327,960 $198,610 N/A $314,087 $374,550 Top Administrative Position $296,585 $4,345 N/A $157,269 $221,067 Top Financial Position $211,439 $188,643 N/A $186,675 $224,809 Top Operations Position $777,535 N/A N/A $275,541 $280,726 Human Services CEO/Executive Director $167,976 $152,905 $152,786 $135,910 $162,109 Top Financial Position $122,702 $115,494 N/A $93,799 $108,140 Top Operations Position N/A $127,754 N/A $122,230 $126,836 Religion CEO/Executive Director N/A N/A N/A $140,722 $178,186 Source: 10 GuideStar Compensation Report

15 Nonprofit Compensation Survey Employee benefits Offering competitive health and retirement benefits is essential to maintaining a high-quality nonprofit workforce. Yet most organizations struggle to provide employee benefits due to rising costs. In the last decade, health insurance premiums have increased by more than 1%. For nonprofits, the cost of premiums is rising twice the average of all employers. Small organizations struggle the most to find affordable health insurance policies, and nationally fewer than half of nonprofits with less than $500,000 in annual revenues provide employee health insurance. Close to half of all nonprofits in the country report passing on rising costs of health insurance to employees, through increased premiums, per-visit or service costs, and/or drug costs. Health Insurance 79.1% of participants provide health insurance coverage to employees, slightly up from last year s 76%. Of those that provide individual health insurance coverage, 36.3% pay 100% of the cost of coverage, 49.8% pay between 50% and 99% of the cost of coverage, and 11.4% pay between 1% and 49% of the cost of coverage. (2.5% do not cover any of the cost of health insurance.) 35.6% of small organizations provide health insurance coverage to employees, compared to 84.5% of medium-sized organizations and 100% of large organizations. 48.8% of those participants that provide health insurance coverage to employees pay for at least some portion of family health insurance coverage as well. Of these, 42.1% cover more than 50% of the cost of coverage. Health Insurance Coverage for Employees Yes 79.1% Family % Paid by Organization 1-49% 50-75% 76-99% 0% 40.2% 100% Health Reform Tax Credit 90.8% of respondents say they did not qualify to use the new health reform tax credit. However, it is possible that many respondents were not aware of the credit, which became available in March 10. Part of the Patient Protection and Affordable Care Act, the credit is available to employers of small companies, including nonprofits that pay for at least half of employees health insurance premiums. To qualify for the full credit, employers must have no more than ten workers and average annual wages of no more than $25,000. Employers with no more than 25 employees and average annual wages of up to $50,000 are eligible for the partial credit. No small organizations reported using the health reform tax credit. 12.8% of medium-sized organizations and 6.4% of large organizations say they were eligible for the credit. Of the small number of participants reporting their organizations were eligible for the tax credit, only 10.4% said they used the credit. Eligible for Health Reform Tax Credit Yes 9.2% 9.8% 11.0% 17.7% 21.3% No.9% No 90.8% Individual % Paid by Organization 0% 2.5% Use of Health Reform Tax Credit 1-49% 11.4% Yes 10.4% 50-75% 19.3% 76-99% 100% 30.5% 36.3% No 89.6% Organization Budget Size

16 Nonprofit Compensation Survey 15 Employee benefits Dental Insurance Coverage 68.1% of participants provide dental insurance coverage to employees. 28.1% of these do not cover the cost of dental insurance premiums at all, while 12.3% cover between 1% and 49% of the cost of premiums, 30.4% cover the cost of between 50% and 99% of premiums, and 29.2% cover 100% of the cost of premiums. 25% of small organizations report providing dental insurance coverage to employees, compared to 72.7% of medium-sized organizations and 93.6% of large organizations. 83.2% of those participants that provide dental insurance coverage extend that coverage to employees families. However, 58.3% of these do not cover the cost of dental premiums for family members. 12.5% cover between 1% and 49% of the cost of family dental premiums, 18.1% cover between 50% and 99% of the cost, and 11.1% cover 100% of the cost. Vision Insurance 46.1% of participants provide group vision insurance to employees. Of these, 27.2% do not cover the cost of vision insurance premiums at all, 15.8% cover between 1% and 49% of vision premiums, 25.4% cover between 50% and 99%, and 31.6% cover 100%. 82.5% of participants that provide employee vision insurance coverage extend that coverage to employees families. Of those that offer family vision insurance coverage, 56.4% do not cover the cost of premiums at all, 17% cover between 1% and 49% of the cost of premiums, 16% cover between 50% and 99%, and 10.6% cover 100%. 15.9% of small organizations report providing vision insurance coverage to employees, compared to 45.9% of medium-sized organizations and 73.5% of large organizations. Family % Paid by Organization 0% 58.3% 1-49% 12.5% 50-75% 11.8% 76-99% 6.3% 100% 11.1% Vision Insurance Coverage for Employees Yes 46.1% No 53.9% Individual % Paid by Organization 0% 27.2% 1-49% 15.8% 50-75% 10.5% 76-99% 14.9% Annual Gross Revenue Dental Insurance Coverage for Employees 100% 31.6% Yes 68.1% Organization Budget Size Family % Paid by Organization 0% 56.4% No 31.9% Individual % Paid by Organization 0% 28.1% 1-49% 12.3% 50-75% 14.6% 76-99% 15.8% 1-49% 50-75% 76-99% 100% 17.0% 8.5% 7.5% 10.6% 100% 29.2%

17 Nonprofit Compensation Survey Employee benefits Tax advantage programs 46.5% of respondents offer some sort of tax advantage program to employees to help offset health care costs. These include cafeterias plans (21.8%), flexible spending accounts (22.2%), health reimbursement accounts (9.9%), health savings accounts (9.5%), and medical savings accounts (1.2%). Large organizations are more likely to provide a health-related tax advantage program to employees. 11.4% of small organizations report providing a tax advantage program to employees, compared to 43% of medium-sized organizations and 91.7% of large organizations. Retirement Plans 28.5% of respondents provide a 403(b) savings program to employees and 24.5% provide 401(k) programs. 24.9% offer a simple IRA, and 7.9% provide profit sharing. The percentage of participants offering retirement plans has remained relatively level since last year, although the number that offer 403(b) plans is up by 5.5%. Participants likelihood of providing retirement plans is correlated with organizational size: 13.3% of small organizations offer a retirement savings program to employees, compared to 64.7% of medium-sized organizations and 100% of large organizations. Tax-advantage Programs Offered to Employees Cafeteria Plan 21.8% Flexible Spending Account (FSA) 22.2% Health Reimbursement Account (HRA) Health Savings Account (HSA) 9.9% 9.5% Medical Savings Account (MSA) 1.2% N/A 53.5% Retirement Plans Offered to Employees 403(b) Defined Benefit/Pension Defined Contribution Profit Sharing Simple IRA N/A 401(k) 24.5% 28.5% 4.3% 2.8% 0.0% 7.9% 37.5% Annual Gross Revenue Part-time Employee Benefits 22.0% of participants say their organization offers benefits to parttime employees. Participants likelihood of providing benefits to part-time employees is correlated with organizational size. Only 6.5% of small organizations provide part-time employees with benefits, compared to 21.1% of medium-sized organizations and 40.8% of large organizations. Benefits Offered to Part-time Employees Yes 22.0% No 64.0% Change in Benefits 22.1% of participants say their organizations have eliminated or reduced fringe benefits to employees since the recession began. 12.2% of small organizations have eliminated or reduced fringe benefits to employees since the recession began, compared to 26.7% of medium-sized organizations and 16.3% of large organizations. N/A 14.0% Fringe Benefits Eliminated or Decreased Since Recession Began 22.1% Yes No 77.9%

18 Nonprofit Compensation Survey 17 Employee benefits Paid Time Off Participants were asked how much paid time off (PTO) their organization s full-time employees receive each year, including sick leave and vacation leave. 44.7% of participants provide combined PTO. The median range of combined days off is six to ten days per year for employees who have been employed by the organization for up to one year, eleven to twenty days for those who have been employed by the organization for one to five years, and more than twenty days per year by those who have been employed more than five years. Number of Vacation Days Received Per Year (based on years of service) 0 days 1-5 days 1 year 1 year 3.8% 7.7% 3.8%.9% 6.0% 3.0% 84.7% 70.1% Vacation Participants were asked how many paid vacation days their organization s employees receive each year. The median range of vacation days is one to five days for employees who have been employed for up to one year, six to ten days for those who have been employed between one and five years, eleven to twenty days for those who have been employed between five and ten years, and more than twenty days for those who have been employed at least ten years. Sick Leave Participants were asked how many paid sick days their organization s employees receive each year. The median range of sick days is one to five days for employees who have been employed for up to one year, eleven to twenty days for those who have been employed at least one year days 11- days More than days 1 year 1 year 1 year 11.0% 5.5% 5.0% 9.1% 12.0% 28.9% 30.1% 25.9% 23.5% 57.0% 53.4% 38.6% Number of Paid Time Off (PTO) Days Received Per Year (based on years of service) Number of Sick Days Received Per Year (based on years of service) 0 days 1 year 57.1% 14.3% 14.3% 14.3% 0 days 1 year 43.8% 21.8% 15.6% 18.8% 1-5 days 1 year 21.6% 8.1% 8.1% 62.2% 1-5 days 1 year 26.6% 17.4% 18.4% 37.6% 6-10 days 1 year 12.9% 8.6% 42.9% 35.6% 6-10 days 1 year 23.3% 24.4% 22.2% 30.1% 11- days 1 year 12.7% 22.8% 23.6% 40.9% 11- days 1 year 19.4% 28.0% 27.0% 25.6% More than days 1 year 8.5% 15.5% 37.3% 38.7% More than days 1 year 7.5%.0% 32.5% 40.0% Annual Gross Revenue

19 18 11 Nonprofit Compensation Survey How to Use the Nonprofit Compensation Survey In 08, there were sweeping changes made to IRS Form 990. As you know, in Part VI of the form - Governance, Management, and Disclosure, question number fifteen asks about an organization s process for determining the compensation of the top management official, and particularly asks if comparability data was utilized in the process. This survey can provide useful compensation data among similar nonprofits throughout the State of Tennessee and surrounding counties and can be utilized in your process for determining reasonable compensation. Form 990 Department of the Treasury Internal Revenue Service B Check if applicable: Address change Name change Initial return Return of Organization Exempt From Income Tax section 501(c), 527, or 4947(a)(1) of the Internal Revenue Code (except black lung benefit trust or private foundation) The organization may have to use a copy of this return to satisfy state reporting requirements. C Name of organization Doing Business As Terminated Amended return A For the 10 calendar year, or tax year beginning, 10, and ending, Application pending J Website: Number and street (or P.O. box if mail is not delivered to street address) Room/suite City or town, state or country, and ZIP + 4 F Name and address of principal officer: OMB No Activities & Governance I Tax-exempt status: 501(c)(3) 501(c) ( ) (insert no.) 4947(a)(1) or 527 Open to Public Inspection D Employer identification number E Telephone number G Gross receipts $ H(a) Is this a group return for affiliates? Yes No H(b) Are all affiliates included? Yes No If No, attach a list. (see instructions) H(c) Group exemption number K Form of organization: Corporation Trust Association Other L Year of formation: M State of legal domicile: Part I Summary 1 Briefly describe the organization s mission or most significant activities: 2 Check this box if the organization discontinued its operations or disposed of more than 25% of its net assets. 3 Number of voting members of the governing body (Part VI, line 1a) Number of independent voting members of the governing body (Part VI, line 1b) Total number of individuals employed in calendar year 10 (Part V, line 2a) Total number of volunteers (estimate if necessary) a Total unrelated business revenue from Part VIII, column (C), line a b Net unrelated business taxable income from Form 990-T, line b 8 Contributions and grants (Part VIII, line 1h) Program service revenue (Part VIII, line 2g) Investment income (Part VIII, column (A), lines 3, 4, and 7d) Other revenue (Part VIII, column (A), lines 5, 6d, 8c, 9c, 10c, and 11e)... Total revenue add lines 8 through 11 (must equal Part VIII, column (A), line 12) rants and similar amounts paid (Part IX, column (A), lines 1 3)..... nefits paid to or for members (Part IX, column (A), line 4) aries, other compensation, employee benefits (Part IX, column (A), lines 5 10) Prior Year Current Year essional fundraising fees (Part IX, column (A), line 11e) fundraising expenses (Part IX, column (D), line 25) expenses (Part IX, column (A), lines 11a 11d, 11f 24f) penses. Add lines (must equal Part IX, column (A), line 2 less expenses. Subtract line 18 from line s (Part X, line 16)..... es (Part X, line 26).. fund balances. Block

20 11 Nonprofit Compensation Survey 19 Supporting Organizations: Alliance for Nonprofit Excellence Memphis The Alliance for Nonprofit Excellence was founded in 1992 as The Grant Center to serve as a resource to the Mid-South nonprofit community in securing national grants. the past nineteen years, the Alliance has helped nonprofits in the region obtain over $240 million in national funding for initiatives that improve lives and brighten futures. This achievement represents a return of more than $30 for every $1 invested in the Alliance. the past decade, as the funding landscape changed significantly with nonprofits competing for fewer available dollars and increased scrutiny from grant makers and the public, the Alliance expanded its services to provide assistance in building high performing organizations that are good stewards of the resources they receive. The Alliance s programming includes the 501(c)ollege (training within seven core areas of management), management consulting, and the Program for Nonprofit Excellence (PNE), to achieve its mission of strengthening nonprofits toward excellence. The Alliance serves more than 30 counties in west Tennessee, east Arkansas and north Mississippi. Its membership includes more than 0 nonprofits ranging from small volunteer organizations to large agencies with hundreds of staff. Nancy McGee, CEO nmcgee@npexcellence.org 5100 Poplar Ave., Suite 502 Memphis, TN T: F: Center for Nonprofit Management Nashville The Center for Nonprofit Management was created in 1986 by the Frist Foundation and the United Way of Metropolitan Nashville to improve the skills of nonprofit executives in middle Tennessee. This simple concept has blossomed into a full set of training, consulting and evaluation programs that meet the education and management needs of the growing nonprofit community. The Center now provides a home to middle Tennessee s nonprofit leaders by offering a place to relax, to share triumphs and to find solutions to problems. It is a place for nonprofit board members, executives and staff to learn how to enhance their services and for the community to appreciate and recognize the enormous positive impact made by these nonprofit agencies. Lewis Lavine, President lewis@cnm.org 44 Vantage Way, Suite 230 Nashville, TN T: F: Center for Nonprofits Chattanooga Responding to the growing need for a comprehensive nonprofit management assistance program, in 1999 the United Way of Greater Chattanooga, along with several partnering foundations, opened the doors of the Center for Nonprofits to provide capacity building services to area nonprofit organizations. Today, the Center for Nonprofits has over 0 member organizations from cities and towns located throughout east Tennessee and north Georgia. Nonprofit staff and board members alike benefit from consulting, training and an ever-growing array of resources available through the Center. Sheila Moore, Executive Director sheilamoore@cnpchatt.org 630 Market Street P.O. Box 4027 Chattanooga, TN T: F: