For nonprofit organizations, transparency is a key part of maintaining public trust and complying with IRS regulations. One common question is whether the executive director’s and staff salaries need to be disclosed on IRS Form 990.
1. Does Form 990 Require Salary Disclosure?
Yes, certain employee salaries must be reported on Form 990, but not all staff members' compensation is made public.
Form 990, Part VII requires nonprofits to report compensation for:
The Executive Director (CEO) and top officers
Key employees earning $150,000+ per year
Current board members who receive compensation (most serve unpaid)
The five highest-paid employees earning over $100,000 per year
Schedule J (if applicable): If any of these employees earn over $150,000, additional details about their compensation must be reported on Schedule J of Form 990.
2. What Compensation Details Are Disclosed?
For employees meeting the reporting thresholds, nonprofits must disclose:
Base salary
Bonus and incentive compensation
Other benefits (e.g., retirement contributions, health benefits)
Deferred compensation (future payouts)
Nonprofits do not have to list all employees or lower-paid staff salaries.
3. Why Does the IRS Require This Disclosure?
The IRS requires nonprofits to report executive compensation to:
Ensure reasonable and fair salaries in line with the nonprofit’s mission
Prevent excessive compensation or misuse of nonprofit funds
Provide public transparency for donors and watchdog organizations
4. Can the Public See These Salaries?
Yes. Form 990 is a public document, meaning that executive compensation data is accessible to anyone, including donors, watchdog groups, and journalists. Organizations like GuideStar (Candid) and Charity Navigator often publish 990s online.
5. How Can Nonprofits Justify Compensation?
To ensure compliance and public trust, nonprofits should:
Conduct salary benchmarking to compare pay with similar organizations
Maintain board-approved compensation policies
Keep detailed records of how executive pay is determined
Conclusion
While most general staff salaries remain private, nonprofits must disclose executive director and high-earning employee compensation on Form 990 (EZ and Full). This ensures transparency, prevents excessive pay, and helps maintain public confidence in the organization’s financial stewardship.