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The 2011 – 2012 Nevada Compensation Study provides comparable compensation data nonprofit organizations need to satisfy IRS Form 990 requirements. The IRS requires nonprofit organizations to report the Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors on Part VII of Form 990 each year (Source) .
Each nonprofit’s Board of Directors must also indicate on Part VI, Section B of Form 990 if comparable data was used in the process of determining compensation for the organization’s CEO, Executive Director and other key individuals (Source) . Failure to manage the compensation process correctly puts the organization and its key employees at risk for intermediate sanctions.
Nonprofits can avoid intermediate sanctions by creating a rebuttable presumption of reasonableness which includes using comparable compensation data when establishing salaries for the organization’s top management (Source).
Click here for 2011-2012 Nevada Compensation Study.