Word Count – 745 – 5 Minutes Read
Addressing the Gender Compensation Gap in Nonprofits: A Call for Equitable Change
As we enter the season when numerous foundations and research organizations release their compensation studies for the nonprofit and tax-exempt sectors, a familiar and troubling pattern emerges: female CEOs continue to be paid significantly less than their male counterparts. This disparity is not new nor confined to the top executive level; it permeates the entire C-suite and beyond. It is a longstanding issue that demands urgent and comprehensive reform.
You might be wondering why an older white male baby boomer like me is addressing this issue. As a former CEO of various associations, I was fortunate to be well compensated, often more so than my female peers. Recognizing this disparity, I strived to promote wage equity within my organizations. However, achieving meaningful change requires more than individual efforts; it necessitates a collective commitment to reforming compensation structures.
The Persistent Wage Gap
According to the U.S. Department of Labor, women working full-time, year-round, are paid only 83.7% of what men are paid. This gap persists despite advancements in education and professional experience. Alarmingly, the wage gap widens as women age and progress in their careers, with older Black and Hispanic women experiencing the most severe pay disparities.
This inequity is not just a statistic; it represents a pervasive issue that affects women’s financial stability, career growth, and overall quality of life. Education and career advancement alone are insufficient to bridge this gap. Systemic barriers and biases must be addressed to ensure that women receive fair compensation for their contributions.
The Role of Directors and Male Executives
Directors and male executives hold significant responsibility in addressing and rectifying this problem. The data is unequivocal, but there often lacks the will to make the necessary changes. Directors too frequently base CEO compensation decisions on their earnings or perceived worth rather than on equitable and market-competitive standards. This mindset perpetuates the disparity and undermines efforts to achieve wage equity.
Directors must detach their personal compensation experiences from their decision-making processes. Instead, they should adopt transparent and equitable compensation frameworks that recognize and reward the value that female executives bring to their organizations. Boards should conduct regular pay equity audits, set clear compensation benchmarks, and commit to closing the gender pay gap within a defined timeframe. In addition, boards should provide their only employee, the executives, with resources to address the issue with other members of the C-suite and beyond.
A Call to Action
Addressing the gender compensation gap requires a multifaceted approach. Here are some steps that can drive meaningful change:
- Transparency and Accountability: Organizations should commit to transparency in their compensation practices, including publicly sharing salary ranges and conducting regular pay equity audits to identify and address disparities.
- Bias Training: Implementing bias training for directors and executives can help raise awareness of unconscious biases that influence compensation decisions. This training should be part of a broader effort to foster an inclusive and equitable workplace culture.
- Mentorship and Sponsorship: Establishing mentorship and sponsorship programs for women can help them navigate career advancement and negotiate for fair compensation. Such programs should be supported by senior leaders who are committed to equity.
- Policy Advocacy: Organizations can advocate for policies that support pay equity, such as legislation that promotes transparency in pay and prohibits discrimination based on gender.
- Benchmarking and Next Practices: Utilizing industry benchmarks and adopting practices from organizations that have successfully addressed pay equity can provide a roadmap for others to follow.
- ACT: Do not wait around for another organization to correct this error. Take specific acts to increase female CEO wages, immediately take action to correct the 28% disparity or correct the issue over a particular number of years, 2 or 3.
- Female Executives Need to Ask: Negotiation is appropriate, and female executives should not be inhibited from expecting substantial compensation. Asking is not easy and may be seen as a risk. Consider an outside consult to negotiate on your behalf.
Move On
The gender compensation gap is a profoundly entrenched issue that requires urgent and sustained action. As a former CEO, I understand the challenges of implementing wage equity, but I also know it is necessary and possible. By committing to transparency, accountability, and systemic change, we can ensure that female executives receive the fair and equitable compensation they deserve. The time for change is now, and it starts with each of us taking a stand and demanding reform.
Let me know what you think.