Compensation Management Software Built for Nonprofits to Make Fair Pay Decisions

The IRS rebuttable presumption procedure is a three-step process that protects your nonprofit if the IRS ever questions an executive's pay. To qualify, you need three things: the pay was approved by people other than the person receiving it, the pay was compared to similar nonprofits' compensation data, and the decision-making process was documented in writing. Meet all three requirements, and the burden shifts to the IRS to prove the pay was excessive, instead of your nonprofit having to prove it was reasonable.

Nonprofits can benchmark executive pay using several trusted sources: the ERI Salary Assessor, the SHRM Nonprofit Compensation Survey, compensation reports from state nonprofit associations, and Candid's Nonprofit Compensation Report (formerly published under the GuideStar name). Form 990 filings from comparable nonprofits are another valuable resource, since that pay data is already public and searchable.

An excess benefit transaction occurs when a nonprofit pays an insider — such as an officer, director, or major donor, more than their work is actually worth. When this happens, the individual can owe a 25% excise tax penalty, and any board member who knowingly approved the excessive pay can face a penalty as well. The best protection is straightforward: rely on real market data and have someone other than the person being paid make the final compensation decision.

Form 990 compensation disclosure requires nonprofits to report, once a year, what they paid officers, directors, trustees, key employees, and any top earner making over $100,000. This includes salary, bonuses, and benefits. Because Form 990 is a public filing, this information is easy to find on sites like Candid and ProPublica.

Yes, most nonprofits can't close every pay equity gap at once, and that's okay. A practical approach is to address the largest gaps first, then spread the remaining adjustments over the next two to three years. Documenting the plan and showing measurable progress along the way counts as a good-faith effort in the eyes of regulators and auditors alike.

Yes. CompBldr sets up one shared pay structure for your national office, and each chapter or affiliate can adjust it to fit their own local market. Your national team retains full visibility across the organization, while each affiliate manages its own staff within that shared structure.

The IRS rebuttable presumption of reasonableness requires independent board approval, comparability data, and contemporaneous documentation. CompBldr's JESAP based job evaluation produces the documented methodology, and Market Benchmarking supplies the comparability data, both timestamped and stored for audit or board review.

Yes. Job Architecture gives every role, whether funded by a specific grant or general operating budget, a consistent level and family structure, so pay stays equitable across funding sources instead of drifting grant by grant.

CompBldr's modular pricing means you subscribe only to the modules you need, for example Job Evaluation and Benchmarking alone, and expand later without a system change. Talk to our team for nonprofit specific pricing.