Charity Leaders Should Pay Close Attention to Obama's Pay Guidelines

Concerns about abuse in the nonprofit world have also led some government officials to suggest that charity groups must adhere to stricter governance standards and perhaps compensation guidelines, as a precondition for federal tax subsidies.

It is thus conceivable that the federal financial-bailout guidelines may signal a new, populist-themed regulatory era for organizations—whether publicly traded or tax-exempt—that rely on government money in one form or another. In response, nonprofit groups’ boards and their compensation committees will want to increase their emphasis on the exercise of sound, common-sense business judgment consistent with the general economic environment.