ExemptPay.com
Compensation Reasonableness Report
Sunrise Community Foundation
Prepared: February 27, 2026
3 positions analyzed
Data sourced from IRS Form 990 filings. Filings through tax year 2024
Disclaimer: This report is generated from publicly available IRS Form 990 data and is intended to assist board governance processes. It does not constitute legal, tax, or accounting advice. Organizations should consult qualified professionals for formal compensation determinations.
Executive Summary
- •This report analyzes 3 positions for Sunrise Community Foundation against the Match Market (50th percentile) benchmark.
- •Executive Director is compensated 21% below the stated market target (CR 79%). This may reflect intentional positioning; board documentation of rationale is recommended.
- •Chief Financial Officer is compensated 17% below the stated market target (CR 83%). This may reflect intentional positioning; board documentation of rationale is recommended.
- •Director of Development is compensated 36% below the stated market target (CR 64%). Board documentation of strategic rationale is required to support governance alignment and IRS defensibility.
- •Estimated bring-to-minimum cost to achieve range floor: $23,836.
- •Average compa-ratio across all positions is 75%, indicating overall compensation is below target.
- •Average Market Composite across positions is $191,002, which is above the average market target of $176,387. Market Composite represents the broad market center (average of mean, trimmed mean, and median). Market Composite reflects the broad market center and may differ from the organization's chosen percentile target.
Organization Profile
| Organization | Sunrise Community Foundation |
| EIN | 12-3456789 |
| State | Colorado (CO) |
| Sector (NTEE) | T - Philanthropy & Voluntarism |
| Organization Size | $1M - $10M |
| Total Employees | 32 |
| Compensation Philosophy | Match Market (50th percentile) |
| Market Target | 50th percentile |
| Positions Benchmarked | 3 |
Market Findings
| Position | Current | P25 | P50 | P75 | MC | N | Quality | CR | Status | PIR |
|---|---|---|---|---|---|---|---|---|---|---|
| Executive Director | $145,000 | $155,802 | $183,500 | $277,207 | $203,672 | 15 | Suppl. Only | 79% | Review | -2% |
| Chief Financial Officer | $172,000 | $155,453 | $206,865 | $280,506 | $231,904 | 665 | Strong | 83% | Review | 6% |
| Director of Development | $89,000 | $114,281 | $138,795 | $163,404 | $137,430 | 83 | Strong | 64% | Flag | -32% |
MC = Market Composite (avg of mean, trimmed mean, median) | N = Sample Size | Quality = Data Quality Designation (see Methodology) | CR = Compa-Ratio (current / target) | PIR = Position in Range
Within Strategy (CR 90–110%) | Context Recommended (CR 75–90% or 110–125%) | Justification Required (CR <75% or >125%)
Position Details
Executive Director
Executive/LeadershipThe benchmark for "Executive Director" has limited comparability data (15 records from 14 organizations). This data should be treated as directional and supplemented with other market references.
Board Discussion — Context Recommended
Compensation for Executive Director is below the typical market band (CR 79%). This may reflect intentional positioning based on role complexity, institutional knowledge, retention strategy, or expanded scope. The board should document its rationale for this compensation level in meeting minutes.
Chief Financial Officer
FinanceThe benchmark for "Chief Financial Officer" is based on 665 records from 636 organizations, providing robust comparability data to inform board review and support reasonableness documentation.
Board Discussion — Context Recommended
Compensation for Chief Financial Officer is below the typical market band (CR 83%). This may reflect intentional positioning based on role complexity, institutional knowledge, retention strategy, or expanded scope. The board should document its rationale for this compensation level in meeting minutes.
Director of Development
Development/FundraisingThe benchmark for "Director of Development" is based on 83 records from 83 organizations, providing robust comparability data to inform board review and support reasonableness documentation.
Board Discussion — Justification Required
Compensation for Director of Development represents a significant deviation from market (CR 64%, substantially below target). Explicit board rationale and documentation are required to maintain governance alignment and IRS defensibility under IRC Section 4958. The board should record the specific factors justifying this compensation level.
Methodology
This compensation analysis was prepared for Sunrise Community Foundation using data from IRS Form 990 filings reported to the Internal Revenue Service. The analysis covers 3 positions.
The organization's stated compensation philosophy is "Match Market (50th percentile)" with a market target at the 50th percentile.
Data sources: 3 positions with direct title-level 990 data.
Statistical measures include percentile distributions (P10, P25, P50/median, P75, P90), arithmetic mean, trimmed mean, and Market Composite.
Market Composite (MC) is calculated as the simple average of the arithmetic mean, the trimmed mean (excluding the top and bottom 10% of values), and the median. By blending three central tendency measures, Market Composite dampens the effect of outliers and skewed distributions that can distort any single statistic. Market Composite is reported alongside the organization's chosen percentile target to give the board context on where the broad market center sits relative to the target pay level.
Limitations: Form 990 data reflects amounts reported for the applicable tax year. Reporting periods may vary across organizations. Part-time and interim positions are included in the dataset where reported. The analysis does not account for geographic cost-of-living differentials beyond state-level filtering.
Important: Data Scope
This report benchmarks cash compensation as reported on IRS Form 990. It does not include benefits valuation, deferred compensation, or non-cash rewards. Total compensation comparisons may vary when benefits are considered.
Pay Range Construction
Pay ranges are constructed around the selected market target (P50): minimum at 80%, midpoint at 100%, and maximum at 130% of the target value. These parameters are configurable by the organization.
Data Quality Designations
Each position's benchmark data is assessed for comparability adequacy:
- Strong Comparability: 50+ records from 15+ organizations — robust for board review.
- Adequate with Caveats: 20–49 records, or peer group data — usable but supplementation recommended.
- Supplementary Only: Fewer than 20 comparable records — directional only; additional market data should be obtained.
Peer Group Criteria
Organization size: $1M – $10M revenue
NTEE sector: Philanthropy & Voluntarism (T)
State: CO
Filing years: Filings through tax year 2024
| Position | State | Data Source | Records (N) | Orgs | Quality |
|---|---|---|---|---|---|
| Executive Director | CO | Title-level | 15 | 14 | Suppl. Only |
| Chief Financial Officer | CO | Title-level | 665 | 636 | Strong |
| Director of Development | CO | Title-level | 83 | 83 | Strong |
Where title-level data is insufficient, peer group or general market estimates are used.
IRS Rebuttable Presumption of Reasonableness
This report supports the IRS rebuttable presumption of reasonableness under IRC Section 4958. When an organization's board (1) relies on appropriate comparability data, (2) approves compensation through an independent body, and (3) documents its decision concurrently, the burden shifts to the IRS to prove compensation was unreasonable. This report provides comparability data; organizations remain responsible for ensuring all procedural requirements are met. The compliance checklist below helps document your organization's adherence to these requirements. See Appendix for detailed regulatory background.
Compliance Checklist
Meeting Documentation
Appendix
Glossary of Terms
- Compa-Ratio (CR)
- The ratio of an individual's salary to the market target (e.g., P50). A CR of 100% means pay equals the target; below 100% is below target.
- Market Composite (MC)
- The average of the arithmetic mean, trimmed mean (excluding top and bottom 10%), and median. Provides a robust central tendency estimate less affected by outliers than any single measure alone.
- Position in Range (PIR)
- Where an individual's salary falls within the defined pay range, expressed as a percentage. 0% = at range minimum, 100% = at range maximum.
- Percentile (P10, P25, P50, P75, P90)
- The value below which a given percentage of compensation data falls. P50 (median) means half of organizations pay more and half pay less.
- Trimmed Mean
- The arithmetic mean of compensation values after excluding the bottom 10% and top 10% of the distribution. Reduces the influence of extreme values.
- Bring-to-Minimum
- The additional compensation needed to bring a position's salary up to the minimum of the defined pay range.
Data Sources
IRS Form 990 (Primary): Compensation data is sourced from Schedule J Part II (detailed 6-column breakdown) and Part VII Section A (summary 3-column compensation) of IRS Form 990 filings. Data covers tax-exempt organizations with gross receipts over $200,000 or total assets over $500,000.
Bureau of Labor Statistics (Supplementary): When Form 990 data is insufficient, BLS Occupational Employment and Wage Statistics (OEWS) survey data provides general labor market context. BLS data covers all sectors and is not nonprofit-specific.
IRC Section 4958 — Excess Benefit Transactions
Section 4958 of the Internal Revenue Code imposes excise taxes on "excess benefit transactions" between a tax-exempt organization and a "disqualified person" (typically officers, directors, and key employees who exercise substantial influence over the organization).
An excess benefit occurs when the economic benefit provided to a disqualified person exceeds the value of the consideration received by the organization. Compensation that exceeds "reasonable compensation" for services rendered may constitute an excess benefit.
Penalties for excess benefit transactions include a 25% excise tax on the disqualified person (first tier), a 200% tax if not corrected (second tier), and potential 10% taxes on organization managers who knowingly approved the transaction.
Rebuttable Presumption of Reasonableness — Three-Prong Test
Under IRC Section 4958 and Treasury Regulations Section 53.4958-6, compensation arrangements between a tax-exempt organization and a disqualified person benefit from a rebuttable presumption of reasonableness when three conditions are satisfied:
1. Independent Body Approval
The compensation arrangement was approved by an authorized body (or a committee thereof) composed entirely of individuals who have no conflict of interest with respect to the transaction.
2. Comparability Data
Prior to making its decision, the authorized body obtained and relied upon appropriate comparability data. This report provides such data from IRS Form 990 filings and, where applicable, Bureau of Labor Statistics surveys.
3. Concurrent Documentation
The authorized body adequately and timely documented the basis for its determination concurrently with making that determination, including the terms of the transaction, the date of approval, the members of the authorized body present, the comparability data obtained, and any actions taken with respect to board members who had a conflict of interest.
When all three conditions are met, the rebuttable presumption shifts the burden of proof to the IRS to demonstrate that the compensation was unreasonable. This safe harbor provides significant protection to both the organization and its leadership.