When did $650,000 become a reasonable Jewish nonprofit salary?

JTA — Running a major nonprofit is difficult. Raising money, managing employees, overseeing complex operations and answering to a board and a myriad of donors are serious responsibilities. Talented people deserve fair compensation.

But somewhere along the way, parts of the American and Israeli Jewish nonprofit world seem to have lost sight of the difference between fair compensation and excessive compensation. When a nonprofit CEO earns $250,000 or $300,000, few people would question whether that person deserves to make a good living.

But when the compensation reaches $700,000, $800,000 or more than $1 million, I think donors have every right to ask a simple question: Why? Why does this particular job require that level of compensation and is that the best use of charitable dollars?

Consider some 2024 and 2025 base compensation figures at prominent Jewish organizations in the United States, reported in tax returns filed by the organizations themselves:

• The president of Friends of United Hatzalah: $557,705
• CEO of Friends of the Israel Defense Forces: $658,065
• The president and CEO of Birthright Israel Foundation: $659,123
• The president and CEO of the Jewish Federations of North America: $794,404
• CEO and national director of the Anti-Defamation League: $1,127,131
• CEO of Hillel (Jewish Campus Life): $698,875
• CEO of the Jewish National Fund: $889,303
• The president and CEO of the International Fellowship of Christians and Jews: $792,254

Again: the argument is not that these are bad executives or that they don’t work hard.

The question is whether the Jewish nonprofit community has allowed the definition of “reasonable” compensation to creep steadily upward. When did nonprofit become corporate?

This is the question that bothers me most. At what point does nonprofit compensation stop reflecting what is necessary to attract excellent leadership and start reflecting the compensation expectations of the corporate world?

A CEO in the corporate world has a primary objective of financial return. A nonprofit CEO has a fundamentally different, purpose-driven responsibility: to fight antisemitism, support Israel, educate Jewish children, assist soldiers, help vulnerable families, provide humanitarian assistance, strengthen Jewish identity or accomplish some other charitable mission.

The CEO is a steward of those resources. That distinction should matter.

Yes, of course “we need the best people.” But this argument can become a convenient conversation stopper. Whenever high nonprofit compensation is questioned, someone inevitably says, “You get what you pay for.” Do we? Does paying a CEO twice as much necessarily produce twice the leadership? Twice the fundraising? Twice the organizational effectiveness? Twice the impact?

What we do know is that there are nonprofit executives running substantial organizations for annual salaries of $150,000-$300,000. That doesn’t mean every nonprofit CEO should earn $200,000. The size and complexity of organizations differ enormously. But their existence does demonstrate something important: There are highly capable people willing to lead nonprofit organizations without demanding corporate-level compensation.

Every additional dollar paid to an executive is a dollar that cannot simultaneously be spent on something else. That doesn’t mean that executive salaries are “wasted.” It means they have an opportunity cost. If an organization pays an executive $200,000 beyond what is reasonable, that money could instead fund social workers, scholarships, food packages, educational programs, security, housing, medical services, or hundreds of other needs.

The legitimate question for any donor to ask is: Is this where the organization believes the next $200,000 will produce the greatest benefit?

What does the salary number communicate to everyone else? It communicates to employees who may be earning $50,000 or $70,000 what their work is worth. It communicates to middle managers who may be working nights and weekends how their sacrifices are valued. It communicates to volunteers who give their time without compensation whether service is a shared responsibility or a one-way street. And it communicates to donors who are repeatedly asked to give more how their charitable dollars are being prioritized.

Imagine being asked to donate $5,000 to help a struggling family — and later discovering that the organization’s CEO earns more than $800,000 a year. A donor may still believe in the organization. But it is entirely reasonable for that donor to wonder: Is this really the best use of my money? That question should not be dismissed as ignorance about nonprofit management. It should be welcomed as responsible philanthropy.

There is another dimension to this discussion. Jewish philanthropy is not simply a business transaction. Our tradition places enormous emphasis on responsibility, stewardship and the proper use of communal resources.

Geneivat da’at, misrepresentation, teaches us not to mislead others.

Bal tashchit, “do not destroy,” teaches us not to waste.

V’heyitem nekiyim, innocence before God and the people of Israel, reminds us of the importance of being above suspicion.

And anavah, humility, is one of the defining qualities associated with the great leader Moses.

None of these principles says that a nonprofit executive must be poor. None says that professional expertise should not be rewarded. But Jewish leadership has traditionally been associated with service and responsibility, not personal enrichment. When the people soliciting tzedakah enjoy a financial standard of living dramatically removed from the people they serve, something worth examining has happened.

Ultimately, this is not primarily the CEO’s fault. If a nonprofit board approves an $800,000 salary, the responsibility belongs to the board. Boards should also resist the temptation to benchmark compensation only against organizations that pay more. That creates a ratchet. One organization raises its CEO’s salary. Another uses it as a benchmark. A third has to match it to remain “competitive.” And suddenly compensation that would have seemed extraordinary a decade earlier becomes “industry standard” — which is not the same as reasonable.

The compensation question becomes even more uncomfortable when high executive compensation exists alongside organizational balance sheets with net cash reserves of tens and hundreds of millions of dollars not being used.

We often scrutinize nonprofits over administrative expenses, fundraising costs and program percentages. We should also scrutinize executive compensation and net cash assets. Before making a major donation, ask for the organization’s Form 990 or financial report. Look at the compensation of the CEO and other senior executives. Look at the organization’s assets.

And then decide whether the organization is using its resources in a way that reflects your values. That isn’t being cheap. That is being a responsible donor. The Jewish nonprofit sector exists because millions of people believe that their money can make the world better.

They give because they believe their money belongs in the hands of organizations that will use it wisely. That trust is precious. Because ultimately, this isn’t about whether a CEO deserves $200,000, $500,000 or $1 million.

It is about whether the people entrusted with charitable dollars have remembered for whom the money is intended and why it was given. And that is a conversation the Jewish nonprofit world should no longer be afraid to have.

The conversation is pro-donor, and ultimately, it is pro-tzedakah — and tzedakah means righteous giving, giving right, giving properly.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of JTA or its parent company, 70 Faces Media.