Nonprofit Leaders Deserve Better: It’s Time to Reward the People Who Power Change.

Why do we hail corporate CEOs with six-figure salaries yet expect nonprofit leaders—who tackle some of the world’s hardest problems—to survive on crumbs? The assumption that doing good must come with personal sacrifice is not just unfair; it’s destructive. If we want lasting impact, we need to stop forcing nonprofits to choose between strong programs and sustainable leadership. It’s time to pay those who power change fairly.

The Unfair Playbook: Why Do We Undervalue Nonprofit Leaders?

Nonprofits are bound by a damaging rulebook that enforces low pay as a virtue. Funders often restrict donations to program costs alone, starving nonprofits of the resources needed to sustain and grow. As Dan Pallotta famously argued in his TED Talk, we systematically discriminate against nonprofits when it comes to compensation. Meanwhile, we celebrate the private sector’s “war for talent,” rewarding expertise and experience. Nonprofit leaders, who deliver life-changing programs on limited budgets, are penalized for wanting fair pay, as if financial security is a betrayal of their mission. This isn’t about greed; it’s about survival.

But why is this the case? The answer lies in a narrative that’s been shaped over decades, even centuries. We’ve been taught to see money as “dirty” especially in the context of charity work. This narrative is suggesting that a life of service must be a life of financial struggle. Figures like Mother Teresa have been glorified as models of self-sacrifice, and we’ve internalized the belief that those who do good should not desire — or even need — fair compensation. While inspirational, this story is not just outdated; it’s harmful.

A Dangerous Double Standard

The stark truth is, many donors are quick to donate to causes that lift people out of poverty, yet hesitate to support fair salaries for the professionals driving that change. Society expects nonprofit leaders to sacrifice financially, assuming that charity should operate on a shoestring. This mindset is shortsighted: under-resourced leaders burn out, talented individuals leave the field, and we lose their potential for impact.

On one side, we have donors who only give restricted funds—sometimes driven by the fear that overhead costs are “wasteful” or that paying nonprofit leaders well is somehow immoral. On the other side, we have nonprofit founders and leaders, often passionate and driven by purpose, who willingly accept these limitations. Many of us have been there, believing that by sacrificing our own compensation, we are somehow maximizing our impact. But let’s be clear: this model is unsustainable.

Imagine if nonprofits could attract top talent without apology. Imagine the scale of transformation that could be achieved if leaders were rewarded for their expertise and dedication.

The Real Cost of Underfunding Leadership

This isn’t just about compensation—it’s about impact. When nonprofit leaders are forced to accept low pay, it doesn’t serve the mission. Burned-out leaders cannot drive sustainable change. A well-compensated leader isn’t a luxury; they’re a catalyst for growth, a steward of resources, and a strategist for scaling impact. Yes, misuse of funds happens, but these cases are exceptions, not the rule. The reality? Well-supported leaders deliver stronger results.

We need to confront the roots of this problem. It’s time to abandon the “martyr complex” that still haunts the nonprofit world. Let’s see these leaders for what they are: skilled professionals who deserve fair compensation.

Let’s Rewrite the Rules Together

So, how do we fix this? First, change the story. Let’s stop telling donors that low overhead is a sign of efficiency. This narrative undermines nonprofits and promotes a distorted view of impact. MacKenzie Scott’s “no-strings-attached” donations challenge this mindset, showing that when funders trust nonprofits, incredible change happens. More donors should follow her lead, trusting nonprofits to use unrestricted funds wisely and prioritizing fair salaries for their leaders. While data and metrics are essential, leaders should be trusted to use resources wisely, just as leaders in any other sector are.

Second, funders and nonprofits need to champion fair pay openly. They must have the courage to advocate for fair compensation and resist the “100% of your donation goes directly to the projects” narrative. Foundations and individual donors alike should support fair compensation as a core aspect of program success, not a distraction from it. And nonprofit leaders should stand firm, refusing to perpetuate the myth that working for a cause means forfeiting financial security.

As Michelle Benson put it: “The more WE keep telling donors their donations should NOT be spent on overhead the more we reinforce we are a sector that operates on a shoe string, the work we do is a nice to have on the side, we are JUST charities.”

Policy Change for a Lasting Impact

Policy also plays a critical role. Governments should scrap outdated caps on nonprofit salary or spending, like the infamous “10% rule,” that limit operational growth. These arbitrary limits suggest that nonprofits should somehow operate on fumes—an expectation we’d never impose on the private sector. Instead, let’s create a policy landscape where operational costs, including fair salaries, are seen as essential investments, not overhead.

It’s not just about nonprofits; it’s about society. When we undermine nonprofit leaders, we weaken the institutions fighting our toughest battles—from climate change to mental health. Leaders have bills to pay, families to support, and futures to plan. When they thrive, so do their organizations, and so do we all.

Stand Up for Fair Pay: From Nonprofit to For-Impact

Words matter. “Nonprofit” defines these organizations by what they aren’t—focused on profit—rather than what they are: powerful agents of change. Rebranding them as “for-impact” reframes our understanding of their work and sets a clear focus on mission and impact. This change in language urges us to support these groups as the vital forces they are, and to value the professionals who make their impact possible.

It’s time to unite for fair pay, for the people who make change happen. Funders, leaders, and advocates—let’s work together to break the cycle of underfunding and undervaluing our greatest assets. The best time to demand fair compensation was yesterday; the second best time is today. Because in a world where doing good shouldn’t mean doing without, it’s time to demand better for those who make better possible.