The IRS has significantly increased its enforcement efforts in the area of excessive compensation and has assessed millions of dollars in penalties for organizations in violation of fair and reasonable practices
Washington, DC and Williamsburg, VA (Vocus) November 11, 2010
GuideStar USA, Inc., the leading source of nonprofit information, today introduced the CEO Compensation Checkpoint Report, a customizable report that analyzes CEO compensation at a specific nonprofit within a group of comparable organizations. The CEO Compensation Checkpoint Report is the first step toward meeting the IRS’s complex requirements for ensuring “fair and reasonable” pay and benefits.
“The IRS has significantly increased its enforcement efforts in the area of excessive compensation and has assessed millions of dollars in penalties for organizations in violation of fair and reasonable practices,” said Bob Ottenhoff, president and CEO of GuideStar. “In addition, the IRS has indicated that it will now include a compensation analysis in every future audit it conducts. It’s imperative that nonprofits demonstrate that their compensation practices are appropriate.”
To create a date- and time-stamped CEO Compensation Checkpoint Report instantly, the user enters his or her organization’s Employer Identification Number (EIN) and the National Taxonomy of Exempt Entities (NTEE) codes or locations that identify the peer organizations that best align with the organization's mission and programs, then selects members of a peer group against which to run the analysis. A report is then created from a proprietary algorithm that draws on GuideStar's rich nonprofit compensation data to create peer comparisons and statistical analysis for total revenue, chief executive total compensation, and percent change in incumbent chief executive total compensation.
In March 2007, the IRS reported that it had levied $21 million in excise tax assessments for excessive compensation at tax-exempt organizations. “The IRS's definition of ‘fair and reasonable’ varies from nonprofit to nonprofit, so it’s best that nonprofits research what people in comparable jobs earn at nonprofits that are of similar size and that have similar missions and programs,” added Ottenhoff. “At GuideStar, we want to put the power in your hands by letting the CEO Compensation Checkpoint Report do the research and analysis for you.”
The CEO Compensation Checkpoint Report is available by visiting GuideStar’s Web site at: http://www.guidestar.org/ceocomp. The report is $500 per each organization that is analyzed, and each user receives a 30-day post-purchase guarantee allowing six different versions of the report to be generated for the Employer Identification Number (EIN) for which it was originally was purchased. To get an idea of the information available on each report, you can also view a sample report.
GuideStar, http://www.guidestar.org, connects people and organizations with information on the programs and finances of more than 1.8 million IRS-recognized nonprofits. GuideStar serves a wide audience inside and outside the nonprofit sector, including individual donors, nonprofit leaders, grantmakers, government officials, academic researchers, and the media.