The highest-paid nonprofit leaders in Lawrence are, left to right, Kansas University athletic director Sheahon Zenger, Gene Meyer, CEO of Lawrence Memorial Hospital, and Dale Seuferling, president of KU Endowment. The median salary for a nonprofit leader in Lawrence is 7,000.

From housing the homeless to raising money for Kansas University to providing health care for the uninsured, dozens of Lawrence nonprofit agencies work daily performing what the Internal Revenue Service considers charitable, tax-exempt work.

While such organizations fit into a similar tax classification, a Journal-World investigation found wide variation in how much the directors of local nonprofits are paid.

An examination of public tax documents for 90 local nonprofits showed the heads of such organizations are paid anywhere from under $20,000 to more than $400,000 a year.

Here’s an analysis of the salary data from the most recent available information, provided by the agency or tax documents:

• The median nonprofit director salary in Lawrence was about $57,000, far lower than the median nonprofit director salary nationwide of about $147,000, according to Charity Navigator’s 2010 Compensation Report.

• Half of the director salaries fall in a range between $42,000 and $81,000.

• 18 local nonprofit directors make more than $100,000 in total compensation, with six making more than $200,000.

• Four of the top five compensated directors — all making more than $300,000 — work for organizations affiliated with Kansas University, including KU Athletics, KU Endowment, KU Alumni and the KU Center for Research.

‘Not apples to apples’

Trying to compare nonprofit salaries and figuring out a way to gauge fair pay for such work is a complicated and subjective task, said James Abruzzo, a nonprofit compensation specialist for DHR International.

“It’s not apples to apples all the time,” said Abruzzo, who helps nonprofits set compensation levels.

For instance, those in the health care sector of the nonprofit world, such as hospital directors, are typically paid on the higher end of the scale, Abruzzo said. That’s the case in Lawrence, as Gene Meyer, Lawrence Memorial Hospital president, is second only to KU Athletic Director Sheahon Zenger in salary. Meyer is paid about $440,000.

Typically, the higher the budget and fundraising needs, the higher the salary, Abruzzo said.

That helps explain why some local directors, even in the same sector, make more than others, he said.

In Lawrence, one of the higher-paid directors, Bruce Beale, who makes $300,000 overseeing the substance abuse and counseling agency DCCCA, handles an annual budget of about $20 million.

That compares to local nonprofits like Douglas County Senior Services, Family Promise of Lawrence, and the Douglas County Dental Clinic, which pay their directors about $50,000 but have much smaller operating budgets.

Regardless of industry standards, it might be shocking for some donors to learn the heads of nonprofits make hundreds of thousands in the name of the charity.

Sandra Miniutti, vice president of Charity Navigator, which releases an annual national nonprofit Compensation Report, said her organization gets a lot of inquiries from donors and the public outraged by what some nonprofit directors make.

Though the IRS sets vague salary guidelines for nonprofit directors, the process for setting compensation is the key to ensuring nonprofits have legitimate compensation practices, Miniutti said.

That process should include comparisons of the salaries of other directors at similar nonprofits in similar sectors. For instance, the board of a homeless shelter would look at the salary of a shelter director with a similar budget in the same general geographic location.

Representatives from several of the nonprofits that pay directors on the higher end of the scale detailed such processes for the Journal-World.

Drue Jennings, a retired business executive and chairman of the KU Endowment Association’s board of trustees, described the rigorous process the board goes through to come up with a compensation package in excess of $400,000 for director Dale Seuferling. In addition to performance evaluations, the process is rooted in analyzing and comparing what similar agencies pay, he said.

A comparison of several other university endowment nonprofits shows Seuferling’s salary is in line with industry standards. For instance, the head of the University of Nebraska Foundation makes about $410,000, while the director of the University of Oklahoma Foundation makes just under $300,000.

Chuck Heath of Lawrence serves on the board of directors for both Lawrence Memorial Hospital and DCCCA, and detailed a similar review process.

“It’s a very thorough process,” he said. “It’s by no means without conversation.”

In the end, the salaries are necessary for the type of high-level work the directors perform and to ensure keeping quality people, Heath said.

“Both of them are outstanding at what they do,” Heath said. “The greatest disservice we could do is lose people like this,”

That’s a common sentiment across the nonprofit world, Abruzzo said, as nonprofits must compete for leadership candidates against the for-profit sector, which can typically offer much higher compensation packages.

“There’s a tendency for them to say you have to pay for quality,” said Abruzzo, and nonprofits have a smaller pool of candidates for high-level positions. “There is a sparsity of nonprofit talent.”

The other side

On the opposite end of the pay spectrum are the majority of nonprofit directors at local human and social service agencies who make under $100,000 and manage shoestring budgets. Of the 90 agencies examined by the Journal-World, 72 have directors making under $100,000, while 36 directors make $50,000 or less.

The sacrifice in pay by such nonprofit executives is a point rarely highlighted, Abruzzo said.

Dealing with dwindling resources and slashed funding sources, some nonprofit directors eschew large salary increases as they experience the day-to-day funding struggles, he said.

“They’re taking less than they are worth,” Abruzzo said.

At Headquarters Counseling Center, executive director Marcia Epstein said it’s difficult to place her salary above other agency needs, particularly in tough times.

For the past several years, Epstein’s salary has hovered around $42,000 as she works to make a decreasing amount of revenue go further.

In 2010, the agency saw its revenue, which is less than some local directors make, dip from about $225,000 in 2009, to about $209,00 in its 2010 fiscal year.

“Salaries are not the first priority,” said Epstein, conceding it’s difficult not to daydream about being able to offer her dedicated staff better pay and benefits.

Through the years in the nonprofit world, she’s aware she could skip over to the for-profit sector and make a higher salary. But she and her family are comfortable with her working for less pay.

“It’s an honor,” she said. “We’ve had wonderful things in our life in spite of my salary.”