Why We Need to Pay Nonprofit Leaders What They Deserve

Written By: Jillian Climie.

When I support clients in the nonprofit sector with negotiating their pay, I often hear the same thing: “Budgets are tight, I can’t ask for that…”

And yes, nonprofit organizations are often financially constrained, especially in tough funding environments. But here’s the thing: all organizations are financially constrained in some way. Startups operate on limited funding or bootstrap just to stay alive. For-profit companies try to keep talent costs as low as possible to maximize profits and shareholder returns, which are scrutinized quarterly. Even public institutions are under pressure to stretch every dollar.

No matter the sector, organizations are trying to get the most value for the least cost. But in every case, success still depends on attracting, retaining, and motivating top talent. That truth applies just as much to nonprofits.

The Guilt Factor

Here’s where nonprofits are different: in the for-profit world, money goes to shareholders. In nonprofits, it goes toward the mission and the good the organization is doing for the world. And that creates what I call “the guilt factor.”

For example: “If they pay me X, I’m taking away funds from Y - which are used for the programs, the community, the impact.”

All of my compensation clients are women, so I admit I have a biased lens, but I believe this guilt is amplified for women. We’re socialized to put others first, to be generous, to be selfless. So when our compensation feels like it’s taking away from a greater good, asking for more can feel morally wrong.

But here’s what we often forget: underpaying people doesn’t serve the mission - it can actually undermine it.

Talent Strategy Drives Success

The best companies understand that talent isn’t just part of the strategy - it is the strategy. Companies like Lululemon, Netflix and Meta have long realized that attracting and retaining great people is their secret weapon. They compensate competitively against the market. They reward performance. They promote internally. And they retain their best people because of it, and those people fuel their growth.

This philosophy extends to nonprofit: if you have the best people, you can build the best organization. So why are nonprofit leaders so often vastly undercompensated?

The Gender Pay Gap in Non Profit 

Another question: why are women bearing the brunt of this problem? Here are a few statistics on the gender pay gap in nonprofit:

• In Canada, Imagine Canada’s 2025 report found that most of the nonprofit salary gap is driven by paying women less. The average salary for a woman working for a nonprofit is 18% lower than the average Canadian salary, while the average salary for men is just 3% less.

• CharityVillage’s 2024 report confirms this continues at the top: Chief Executives in the nonprofit sector who are men earn 18% more than women in the same roles.

• In the U.S., Candid’s 2024 report reveals that in organizations with budgets over $50 million, women hold fewer than one-third of CEO roles, and earn only 77 cents on the dollar compared to men (down from 82 cents in 2012).

  
  

This is not just a pay issue. It’s a leadership issue, a talent issue, and a systemic issue.

Time for a Rethink

We need to stop thinking of nonprofit work as a charitable act that deserves minimal compensation. Nonprofits are tackling some of the world’s hardest, most meaningful problems, from homelessness and food insecurity to climate change and domestic violence. They deserve our respect, our resources, and competitive pay.

I know non profit leaders (shout out to my mom) who are smarter than corporate CEOs, but why are we discounting them?

Investing in leadership isn’t taking away from the mission, it’s fueling it. Long-term retention of top talent leads to long-term impact and sustainability. It’s time we started compensating nonprofit leaders accordingly.

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Are you a nonprofit leader who needs support in negotiating their pay? Check out our expert compensation negotiation services for women here.