Paying Directors in the Not-for-profit Sector

Context

The world is changing. Are not-for-profit organisations changing with it? Historically, charity and not-for-profit boards have worked for the good of the cause, with no expectation of payment.

The world has changed – people work longer hours and have less time to contribute, the retirement age has increased, and everyone seems to be busy – but this view of the way boards should operate persists. And that was before the global pandemic upended everything and sent volunteer numbers through the floor.

In this climate, organisations might be considering paying board directors, in recognition of the work they do and the responsibility they carry, and to make it easier to recruit new directors.

Of course, paying board directors is only one of the measures you might adopt to achieve these ends. And there are pros and cons of paying board directors that are unrelated to those outcomes.

The Institute for Community Directors Australia (ICDA) is regularly canvassed on the topic of whether not-for-profit organisations could or should pay directors (and, if so, how much?). With over 4000 members, over 10,000 education program beneficiaries per year, regular member surveying and a popular Board Matching Service for community boards, ICDA has unique access to good data on the topic.

More information
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Board Payment Wizard
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Should your organisation pay its board members?

The Board Payment Wizard leads you through a series of questions and answers designed to help your organisation to decide whether you should pay your board members. You'll need to allow at least 20 minutes to answer the 11 questions and consider the Wizard's responses.

Ten questions every director needs to ask about the board’s director payment policy
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These 10 questions are designed to help your board to explore the practical, financial and ethical dimensions of a board payment policy. They assume that your organisation does not currently pay its board directors.

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