More than 1.4 million nonprofit organizations were registered with the U.S. Internal Revenue Service in 2009, and the 632,604 public charities -- those known as 501(c)(3) organizations -- reported $1.4 trillion in revenue and $2.53 trillion in assets, according to a 2011 report by the Urban Institute in Washington, which tracks nonprofit activities.

Groups such as Charity Navigator aren't suggesting specific limits on pay such as a $199,000 limit proposed in the state of New York, Berger said. The nonprofits need to ensure the pay they adopt is easily defensible among other executives, he said.

The norm is low six-figure compensation, a median of $130,000 to $140,000 for midsize to large nonprofits, he said, with pay rising to $500,000 for the biggest groups, Berger said.

Top Charities

The focus of the pay controversy, much like the protests centered on the richest Americans, is on the 1 percent of the largest charities that raise about 86 percent of the funds, Berger said.

"In these very hard times, money is all that more precious and you have to maximize it," he said.

The furor over pay to CEOs of nonprofits is misplaced and may end up damaging charity fundraising, said Dan Pallotta, author of "Charity Case" and "Uncharitable," books on the steps the nonprofit world can take to be more effective.

"We have this total double standard that extends beyond compensation issue where we blame capitalism for creating these huge inequities in our society and then refuse to allow the nonprofit sector to use the tools of capitalism to rectify the situation," he said.

Expert Executives

The expertise of a top-paid executive will increase the amount of money raised at the nonprofit organization and also provide more efficient leadership, Pallotta said.

"It's always positioned as a zero-sum game, where any money paid to the leader is money wrenched out of the hands of those kids rather than looking at it as money invested in the leader to potentially dramatically enlarge the money available to the kids," he said.

Each of the highest-paid coaches at nonprofit universities in 2009 was paid more than $2 million, and people accept that, Pallotta said.