Nonprofit Family Employment: What the Raw Counts Hide

American nonprofits are required to disclose when they pay a family member of an officer, director, trustee, or key employee. The disclosure goes in an unusual place - not on the main compensation page of Form 990, but in a separate schedule most people never read.

We parsed that schedule - Schedule L - across 2024 and 2025 nonprofit filings. The result: nearly 20,000 tax-exempt organizations disclosed at least one "interested-person transaction" over the last two years. Of those, 5,914 disclosures specifically involve employing a family member of an executive, and 3,849 unique people have been identified as family-member employees.

For most organizations on the list, the disclosure is routine: a hospital employs the spouse of a physician who is also a key employee; a university pays a faculty member whose sibling serves on the board; a nonprofit hires the adult child of a donor. The IRS requires these arrangements be surfaced so the public can assess whether they represent reasonable employment or something closer to self-dealing.

But which organizations actually have unusual concentrations of family employment is a question that depends entirely on how you measure.

Raw Counts Mislead

The obvious first question is "which organizations have the most family-member disclosures?" But that list is dominated by large, thorough-disclosing health systems - Mayo Clinic tops it with roughly 120 disclosures across its various reporting entities. That raw-count ranking says more about scale and reporting culture than it does about anything unusual.

A fairer question is rate: for every million dollars of an organization's revenue, how much shows up on Schedule L as family-member compensation? This normalizes for size and surfaces the institutions where family employment is unusually concentrated.

Top 10 by Family $ per $M of Revenue

Filtered to organizations with at least $500M in annual revenue and 5+ disclosed family arrangements (to avoid small-denominator noise).

On a rate basis, Freeman Health System (Joplin, Missouri) and Kalispell Regional Medical Center (Montana) come out on top. Both are regional, non-academic hospital systems with revenue under $1 billion. Mayo Clinic, which dominated the raw count, ranks 14th on this measure at $1,026 per million of revenue - a third of the rate at the top.

Mayo's apparent "lead" in raw disclosure volume is an artifact of two things: it's one of the largest nonprofit health systems in America, and it is unusually thorough in its Schedule L disclosures. On a per-dollar-of-operations basis, it is in the middle of the pack.

Top 10 by Raw Disclosure Count (for comparison)

Included for completeness. This is the list most reporting would default to - but it mostly reflects scale and disclosure practices rather than anything unusual.

The Largest Individual Family-Member Payments

Most family-member disclosures are small - an adult child working as an administrative assistant, a spouse in a junior role. But a handful involve senior clinicians whose compensation looks like standard executive pay:

The Case for These Arrangements

Most family-member employment at nonprofits is defensible. Two practical realities:

• Professional couples cluster in the same institutions. Two physicians who meet in medical school often end up at the same hospital. Two academics frequently land on the same campus. A rule that banned hiring relatives would force one half of each couple to commute across states or change fields.
• The roles are usually clinical or technical, not discretionary. A cardiologist-spouse of another cardiologist is paid a cardiologist's salary because that's what the market pays cardiologists - not because of the relationship.

The Case Against

Critics raise concerns where the pattern starts to look less like coincidence:

• Compensation determination. When a key employee's spouse is evaluated by a team that ultimately reports up to that same employee, independent compensation judgment can erode.
• Position accumulation. Multiple family members in related leadership roles concentrate decision authority in a narrow circle.
• Founder-family orgs. Small nonprofits founded by one family sometimes become extensions of that family's employment and salary structure, decades after founding.

What the Disclosure Actually Says

Schedule L is not an accusation - it's a requirement that certain types of transactions be surfaced for public review. A disclosure like "Family member of Key Employee received $660,000 for employment" means the organization did its paperwork. The more interesting analysis is comparing the scale and frequency across institutions, which is what the table above allows.

The complete list of disclosed family-member employees is now searchable on this site. Each one has a profile page, tagged as a family-member disclosure rather than as an executive in their own right.

Compensation figures represent peak total compensation disclosed on IRS Form 990 filings, including base pay, bonus, deferred compensation, and other reportable income across all filing years (2001–2025). Separation packages, deferred-comp payouts, and emeritus/former officer entries have been excluded from these rankings, though one-time payments may still inflate individual totals. See the full methodology.

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