Alert for Not-for-Profits: Executive Order 38, issued by Governor Cuomo early in 2012, has been modified, and written with an effective date of July 1, 2013. It is open to public comment until April 12. Organizations are beginning to prepare for compliance. Please contact Mary Rizzuti at (201) 934-0505 x107 or at firstname.lastname@example.org with any questions.
Developing and managing Executive Compensation within a Not-for-Profit organization is a complex task. The importance of conducting thorough, independent research is critical in developing compensation programs in Not-for-Profit organizations.
The programs and methodology utilized by CRI meet Intermediate Sanctions requirements and industry best practices, while providing the justification and supporting documentation called for in the Rebuttable Presumption requirements.
Challenges Not-for-Profit organizations face relative to Executive Compensation:
Multiple layers of extremely punitive regulations – These include Intermediate Sanctions (IRC Section 4958) and IRC Section 4941 relative to self-dealing, IRC Sections 457(b) and (f) relative to deferred compensation, and IRC Form 990 requirements. These are in addition to the typical employment and compensation-related regulations, as well as accounting and tax rules already in place covering For-Profit businesses.
The visibility of the NFP and the perception by many different stakeholders, including the public, legislators, and media – There is a long held belief that compensation in NFPs should be below market. There is, sometimes, a lack of understanding by the public, of the need of NFPs to compete with for-profit companies within the competitive labor market for talent, the intricacies of the compensation arrangements, and the overall depth of expertise and responsibility required by executives of NFPs.
- The difficulty and uncertainty of funding – Most organizations have to work within their budget; however, NFPs have the uncertainty inherent because of the source of their funds, and the restrictions imposed on how it can be used for compensation purposes.
CRI has extensive experience working with NFP Boards and executive management to develop creative and successful compensation programs that help to attract, retain and reward the achievement of key operational business objectives.
In July 2014, CRI released the results of its 2014 Compensation Survey of Not-For-Profit Organizations. The purpose of this study was designed to capture compensation data of positions within a broad range of not-for-profit classifications. This survey also reports the prevalence of various programs and practices relative to executive compensation, covering annual incentives, long-term incentives, various perquisites, supplemental benefits, and agreements. To learn more about the survey and/or to purchase, click here.
We are available to answer any questions you may have, and to provide the necessary support to your organization. Please contact us or call Mary Rizzuti at (877) 934-0505 x 107, email@example.com to discuss your compensation needs.