While we offer guidance on some "hot topics" below, these resources are by no means comprehensive. We encourage you to join your state association of nonprofits and sign up for free newsletters about employment law updates in your state to stay abreast of changes to the laws in this frequently-changing and important management area.
It's prudent to check backgrounds before hiring - and even before confirming a volunteer's service. Nonprofits often place volunteers and employees in close contact with vulnerable populations. If a nonprofit "should have known" that the volunteer or staff member had a history of violence or dishonesty etc., the nonprofit may be liable for legal damages resulting from "negligent hiring." There are also liability risks relating to conducting background checks/screening in ways that may violate privacy rights.
Compensation is more than just straight salary. The IRS considers “compensation” to include the total of all “income” received by the CEO, which includes, for example: contributions to retirement accounts, housing, and car allowances, as well as insurance premiums paid by the nonprofit to benefit the executive director and other benefits with a clear “income” value. (See IRS Form 990 instructions, pages 29-31.) Secondly, some board members may not appreciate how easy it is for others to see what their nonprofit pays its chief executives. Nonprofits that file the IRS Form 990 or 990-EZ are required to report compensation to the CEO, and with a few keystrokes on Guidestar, the executive’s compensation is revealed.
Where can I find salary survey data? When you are comparing apples to apples, it’s helpful to have access to salary and benefits survey data. Many state associations of nonprofits collect that data and provide it to their members. There are survey reports for sale from a variety of sources, and a few reports available at no-cost on the internet. National nonprofit compensation data is also available for purchase from Association TRENDS, Guidestar, and The Nonprofit Times.
Contracts with CEOs. Are you considering whether to have a contract for your nonprofit's executive director/CEO? Read about The basics for negotiating contracts with CEOs/executive directors, in this article by the law firm, Venable, LLP.
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