Gender Pay Differences in Senior Management of Charities

Abstract

We investigate gender pay differences in the market for senior management in the U.S. charities sector. Using charity-level data from 990 forms filed for the U.S. Internal Revenue Service, we document two new stylized facts. First, we find that female managers are more likely to receive compensation than male managers. Second, conditional on receiving compensation, female managers receive 8% lower total compensation than male managers. We show the gender pay gap is only present in the largest charities (top two quintiles in the revenue distribution). Both findings are robust to the inclusion of charity classification fixed effects (between estimator) and charity fixed effects (within estimator). Furthermore, we find a mismatch between pay dispersion and performance dispersion exists as potential mechanism behind our stylized facts. We find that better performance is compensated with higher pay among male managers, but it is not so among female managers. This is consistent with organizations perceiving male managers as differentiated unlike female managers, yet there are no differences in performance dispersion supporting this perception.