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Wednesday, February 11, 2009

Non-Profit CEO Pay and Government Funding

President Obama has decided to set restrictions on compensation for the top executives at certain for-profit institutions who receive financial assistance from the government. The cap has been set at $500,000. With this new policy, we decided to take a look at CEO compensation for non-profits that accept government funding.

Compensation for the CEOs of non-profits has always been a topic of controversy. Some believe compensation must be competitive with the for-profit sector to retain talent; while others believe that extremely high salaries are downright offensive.

Of the charities on our site, there are 93 charities that accept government funding and also pay their CEO $500,000 or more. These organizations include: Boys & Girls Clubs of America, American Red Cross (recipient of a $100 million government bailout), Easter Seals, March of Dimes, and the American Cancer Society. Of these 93 charities, 33 accept more than $100 million in government funding and pay their CEO $500,000 or more. These organizations include: Stanford University, Harvard University, The New York Public Library, Dana-Farber Cancer Institute and Massachusetts Institute of Technology.

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Gena said...

Thank you for sharing this. I would suggest that we put some of these salaries in context (just as you did with the American Red Cross). Some of these CEO's are managing organizations that are multi-million dollar "businesses." As such, their salary compensation is reflective of the size of the organization's revenue and project stream.
To lump university presidents in with Boys and Girls Clubs is not a fair comparison. As you know, there is more to the story than what the numbers indicate.

Gena Rotstein

Billy Whyde said...

According to the American Cancer Society's own IRS 990 returns available at the ACS website it looks like the National CEO gets over $1,000,000 a year where Consolidated Division Directors get about $500,000 a year.
One must remember that organizations cross funds in Coalition goals which further distracts what Federal Funding is really being used for.

Sandra Miniutti said...

Here's an interesting article on this topic from the Chronicle of Philanthropy:
"Executive Compensation at Charities Attracts New Scrutiny" http://philanthropy.com/news/updates/7162/executive-compensation-at-charities-attracts-new-scrutiny

Anonymous said...

Comparing these salaries to "for-profit" salaries is just ridiculous. These organizations exist out of the goodness of the people who contribute. We give under the impression that we are Helping others....NOT Helping CEO'S to get Rich. Just imagine how many more people could be helped if the Charity was actually Charitable in their Own House and just took a regular salary for collecting other people's hard-earned money.

robynhoode said...

This is absurd non-profit is just that NON-profit I won't get out of hand and say that anything above average living expensesis to much, but hey 80,000 is wealthy according to our tax brackets, no? Seriously take everyone making more than that and put the billions of dollars that you come up with into the orginazation themselves now thats economic stimulus at it's finest. CEOs need a major moral gut check, I want to have a 1on1 with the person that complains about making 100,000 a year because they are in the wrong buiness and part of the problem, not the solution. Predator on poverty is the coin I'm terming for those of them who won't sit down with a real missionary that lives in the mud next to the people they serve and ask for nothing in return. Sure there is a shinning example that dumps it all back into a good cause i,m sure, but make it official and set an example. I say cap the heck out of all non-profit. Let them invest like the avergae Joe to make there money. What is the worst that can happen, you'll see a bunch of millionares out of work? I wonder how much change we would see in a march of dimes collection boxes if they said "The first $500,000 donated will go to the CEOs swiss bank account." This rant is the but a butterfly's flap to start the hurricane of good will towards all men and woman who are created equal.
Robyn Hoode

Kinneth said...

These organizations do still have to pay employment taxes for any hired workers, but are often exempt from other taxes at the state level as well. Tax-exempt status does not necessarily mean that contributions to the organization will be tax deductible by the donor. The IRS has regulations on the specific types of organizations that are eligible for tax deductible status.

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Unknown said...

Nonprofit leaders should realize that if they wish to be able to recruit the best and then retain them, they must offer competitive pay with competitive benefits packages, just like any other industry.
Joseph Levinson