[Kirk]

Not sure where this topic really belongs. It doesn't necessarily sound like good news but, then again, it might have a ripple effect which could turn into "good news." I've been waiting for this day to happen for a while, so please excuse my giddyness and overly passionate (excessive) post.

http://news.yahoo.com/s/ap/us_charity_expenses

The news story says that the government is looking into excessive pay of one large US charity. The reason I'm excited about this news is because this might usher in a wave of charity reform and the media (or powers that be) will help us start to clean house within the non-profit sector.

High-paid charity CEOs is something we at Isara have been questioning ever since it was brought to our attention a while ago.

This investigation is a good thing because it could mean one of two things could happen (hopefully, both); 1) more money will get to the people the charities are suppose to be helping or 2) charities will bring in executives who are more interested in making a difference than making a buck!

It's pretty much common sense. If someone wants to drive a Porsche, or live in a mansion, or make $500k/year, then there are tons of opportunities to do that in the for-profit sector. That's why we have a private sector. To give people opportunities to live their dreams. But, on the other side, we've also created the non-profit sector where people can focus their time and money on helping the less fortunate and the causes that help other people reach their dreams. Both sectors are important and both have created "some what" of a balance.

Until now.

Some where along the way, for-profit-minded people (searching for a new way to make a buck) slipped into the non-profit sector and they setup shop. This isn't really news to some of you. Our volunteers and I see it everyday via some of the so called "volunteer organizations" who charge people ridiculous amounts of money, all in the name of charity.

Sadly, the need for greed has no limits to what areas and resources it will exploit. Where ever you find someone in need you'll also find someone else thinking of a way they can package that person's suffering and sell it to make a buck. It is disgusting and, unfortunately, it happens much more than people realize. Mainly because we have this idea that people who run charities are saints. When we think of greed we think of the Bernie Madoff's and corporate "fat cats" of the world. Not the poor little non-profits begging for money so they can help feed the hungry. But, in today's world, there are CEOs of charities who drive a Porsche, and have a mansion, and it was all paid-for by charitable donations. If that doesn't make you a little angry then I haven't done my job with this post.

If you want to check the charity CEOs you support, visit the link below. If you don't like what you see then contact them and let them know. That's the only way we can erase greed from the non-profit sector.
http://www.bbb.org/charity-reviews/national/

Here's just a few examples while clicking around the list:
United Way - Almost $1 million for the CEO. Yikes!
ASPCA - Almost $500k for the top executive. That's a lot of doggy biscuits!
United Network for Organ Sharing - $470k for the CEO. Wonder if he's an organ donor?
CARE USA - At least two executives making more than $400k/year.
Volunteers of America - $300k+ for the top executive. Is there such a thing as a paid volunteer?
Children's Scholarship Fund - At least two executives making $250k/year. That's a lot of scholarships!
Make-A-Wish Foundation - Over $330k for the top executive. Guess we know what he wished for.
Lance Armstrong Foundation - $300k for the top executive. That's 300,000 Live Strong bracelets (every year).

During our research we found MANY charity CEOs listed who were receiving $100k, $200k, $400k and even a few who make over a million dollars. Again, if they worked for a for-profit there would be absolutely NOTHING wrong with those impressive salaries and they might even be nice success stories. BUT, since they made their "fortune" from charitable donations, it's hard to look at them with anything but resentment and, sorry to say, disgust.

Don't get me wrong. There are also MANY charity CEOs on that list who make a reasonable (and respectable) salary of $30k, $40k, $60k, and even $80k, even though their charity is bringing in millions of dollars in funding and they manage hundreds of employees. They are seemingly "free from greed" and I hope there will be more of them in the future.

So where do we draw the line of what is a for-profit salary and what is a non-profit salary? $100k? At what point does a person's salary become profit? Should there be a cap on non-profit salaries?

[thartley]

I remember this topic.    Very frustrating.  But one thing to keep in mind while you are looking at CEO salaries at various registered non-profits is that they have a board of directors and/or trustees who vote on and approve these salaries. To me, that says there is something fundamentally wrong with the organization at a basic structure level.

Also, pay attention to the liquidity of that salary.  Is it all in the form of a paycheck or is some part of it appropriated out "in kind", meaning when the organization reports the salary, they are factoring in a monetary value for "perks" that go with the position in order for them to do the job.

People just cannot be forewarned enough to do their homework and be educated about the organizations they choose to donate to. 

[leon]

I agree with you,it is absolutely disgusting.Just think of how many needy people could be given a better chance in life with those salaries !

Why don't you also publish charity organizionts names where volunteering is for free, and that way get would be volunteers to rather go there instead of to the fat cats.That way their profits will diminish and the genuine charities will benefit more.

I also don't know if this is good or bad,Idealist.org is also appealing for donations ( target $ 500 000 )to fund their organization

[Kirk]

Honestly, any CEO who is comfortable making six or seven figures from their own charity is someone who doesn't have the organization's best interest in mind and, therefore, are not qualified for the job as a charity President. If they did care they definitely wouldn't take money away from the kids or trees or animals they're trying to help. They are looking out for number one and they should leave so that some one who really cares, and is more qualified, can take over. Then, and only then, will we really be able to see the full potential of that charity. But there has to be a fundamental change within the organization to allow those right people in.

One argument I've heard is that the high-paid CEOs are needed because they are the only ones capable of managing such large organizations.  That's just a sales pitch the for-profit CEOs gave the non-profits and, unfortunately, some of them bought into it. Much like a car salesman trying to hard-sell the rust proofing on a car. "Well, if you really care about your car then you're going to have to pay more. It's up to you?" Sorry, but I'm not buying it.  There are people within all of these large organizations, who have worked there for years, and know exactly how it's managed, inside and out. And those people are probably just as qualified, and care more about the organization, than someone who was brought in from the outside.

Besides, most of the high-paid CEOs are just figure-heads. They go to the fundraisers, they do the ribbon cuttings, and they do the TV appearances. It's the people within the organization who do most of the managing and day-to-day operations.

Another option to consider is bringing in retired for-profit CEOs who have made their millions and now want to give back by heading a large non-profit, for a reasonable salary (or none). I'm sure that's on a few Bucket Lists out there. :-)

Also, maybe it's time these massive charity organizations get broken into smaller components (branches), so they don't have to manage so many people and so much funds. When you are dealing with hundreds of millions of dollars in funding it's very easy to feel as though a $500k salary isn't a lot of money. So maybe some of these larger organizations should break into smaller groups so that the help they provide is more finely tuned to the local communities.

Just thinking out loud.

[ZeroG]

These high paid executives have their own moral and ethical issues, which I can't really control. These people have turned running a charity into a career. What is interesting about the original article is that the US Government representatives are questioning the salaries of charitable organizations which is ironically what a government is. I send money to the government to help out other people, and myself in a small way. Taxes are just mandatory charitible contributions. The US congress is no way to run a charitable organization. Talk about waste.

Anyway, we're talking about money here, and that is what makes everything work. Rather it is going into the pockets of a high paid executive of a charitable organization or going to the company who manufactures the Live Strong bracelets, it ultimately ends up in someone's pockets. The only pure way to help someone is with your time. There is zero overhead when you use your time to teach someone for example. All of us at Isara know that we are paid back in 10x when we see the appreciation on the student's faces. However, when you can't spend your time, you do get some satisfaction by donating money, which I call the currency of human time. We still get a good feeling when we donate money, it isn't as rewarding as donating time directly, but it does satisfy a basic human need.

Reading about how the money is actually spent really diminishes this feeling for me and makes me want to volunteer more of my time or donate money to organizations which are thinner and closer to the actual human time resource, like Isara.

[Jenia]

This makes me nauseous..straight on the heel of recent issues in the U.K regarding banker's huge bonuses and MP expenses, I don't know if there have been any similar occurances to these in the U.S? This however is a real kick in the teeth and is beginning to emerge as something of a regularity that is rearing it's ugly head wherever possible. I suppose I thought (naively) that this would never happen in the the non- profit sector. It really is very sad indeed.

[hillscott]

Just one added note for those of you that may not know. The reason for the senators raising this issue are not purely out of disgust for the greed previously discussed. As disgusting as it is, there are real issues of legality here.

These NGOs receive a substantial portion of their operational funds from US tax dollars. The US is often the largest contributor to many NGOs and multi-lateral organizations. Currently there are numerous restrictions on an organization wishing to receive grant funds from the US government. CEO pay is not currently one of those restrictions. It should be.

Unfortunately this issue has been raised quietly and routinely in the past and it often goes ignored. If we want change there is a simple solution that would remake the entire NGO space. You want US $$ you must put pay caps in place. We did it for TARP and that's for-profit. How should block grants be any different?

Just my two cents.

[Jenia]

Theoretically yes. But deeper than that is the notion that to be a CEO of an non profit organization, surely that person's greatest interest is to help people, money should be no object. I think perhaps that to introduce 'capping' is to suggest that the capping of the salary is an issue to the person who's salary is being capped, and that in my opinion means that they are not entirely suitable for the job..Perhaps what needs to be addressed is an issue that goes beyond money management..