Male nonprofit CEOs earn more – but the problem runs deeper than a simple gender pay gap

Although about three out of every four Americans working for nonprofits are women^[1], men hold a disproportional share of the highest-paid nonprofit jobs.

What’s more, the share of women in top management jobs decreases as an organization’s budget increases. Feeding America CEO Claire Babineaux-Fonte was the only woman named as being among the highest-paid executives leading one of the nation’s 10 top charities^[2] in 2018, according to a Forbes ranking. Men were running the rest, including Boys and Girls Clubs of America and Habitat for Humanity.

Because I research both nonprofit management and gender inequality in the workplace^[3], I wanted to learn more about the gender disparity in nonprofits’ top management.

Few women at the top

When I analyzed the 2015 tax returns of 340 human service organizations with budgets of US$10 million or more, I found that only 35% of them had female CEOs, even though women make up the vast majority of their staff^[4]. Among nonprofits with budgets of $50 million or more, the share of female CEOs was even lower – 20%.

I also found that the scarcity of women in top management positions in high-budget nonprofits explains a large part of the disparity.

In other words, the gender pay gap had more to do with the lack of female CEOs in larger organizations than it did with high-ranking male nonprofit executives outearning their female peers when they are in charge of nonprofits of approximately the same size.

This was consistent with earlier findings^[5] that the nonprofits with the biggest budgets are less likely to be run by women than smaller ones.

For the study, published^[6] in the academic journal Nonprofit Management & Leadership^[7], I wanted to go deeper by determining what might explain women being underrepresented in top management positions – and if nonprofits can do something to even things out.

That led me to look into the composition of those nonprofits’ boards of directors. Nonprofit boards are responsible for recruiting, hiring and firing CEOs. According to well-documented research, boards are more likely to hire female CEOs^[8] when some of their members are female.

Nonprofit boards

I found that the likelihood of a woman being hired as a nonprofit CEO decreases by 0.2 percentage points with each million-dollar increase in its revenue.

A nonprofit with a $50 million budget, therefore, is 8 percentage points less likely to hire a woman as its CEO compared to an organization with a $10 million budget. An organization with a $100 million budget would be 18 percentage points less likely to hire a woman as CEO than a group with a $10 million budget.

I also found that an organization is 17 percentage points more likely to have a female CEO when between a third and half of the board’s voting members are women, compared with when less than a third are female. But when a majority of board members are women, the board is no more likely to hire a female CEO than organizations where women account for less than a third of the board.

This finding reinforces the results of several other studies that also indicated that when the share of women on boards reaches critical mass, these directors tend to become more apt to hire female leaders^[9]. Past research has also suggested that the most progress occurs when women on boards are a minority of members^[10], as long as they aren’t tokens^[11].

No cure-all

Advocates for board diversity of all kinds say it improves performance, makes nonprofits more responsive to their clients and helps bring in more donations^[12]. My findings suggest that board diversity is also a force for narrowing the gender gap among the leaders of the biggest nonprofits.

To be sure, there are other obstacles standing in the way of women getting the highest-paid nonprofit jobs. For example, gender stereotypes regarding leadership styles view women as less visionary and as less achievement-oriented^[13] and may hinder women’s advancement to top management. Women also tend to spend more time on child care than men, which makes balancing their work and family responsibilities more challenging^[14].

And having equal numbers of men and women on the boards of big nonprofits is no cure-all. If it were, women-majority boards would be more likely to hire women as CEOs than boards where women are in the minority. And that was not the case at most of the organizations I researched.

References

1. ^{^} working for nonprofits are women (www.councilofnonprofits.org)
2. ^{^} the nation’s 10 top charities (www.forbes.com)
3. ^{^} nonprofit management and gender inequality in the workplace (scholar.google.com)
4. ^{^} vast majority of their staff (www.hrcouncil.ca)
5. ^{^} earlier findings (boardsource.org)
6. ^{^} published (onlinelibrary.wiley.com)
7. ^{^} Nonprofit Management & Leadership (doi.org)
8. ^{^} boards are more likely to hire female CEOs (doi.org)
9. ^{^} more apt to hire female leaders (doi.org)
10. ^{^} a minority of members (doi.org)
11. ^{^} aren’t tokens (www.egonzehnder.com)
12. ^{^} helps bring in more donations (www.councilofnonprofits.org)
13. ^{^} less achievement-oriented (doi.org)
14. ^{^} family responsibilities more challenging (doi.org)