Nonprofit Organizations, The Salaries of Some of Their CEO’s and Our Donations — An Unbiased Opinion

I must confess, I am a sucker for volunteering, donating to the causes I believe in and generally everything that takes money from me instead of making me money. Why? I am still in therapy to “discover” the roots of what makes ME,  as my friends say, despite being smart and educated not having enough money. And I do not mean millions, not even what by all standards is considered “average.” Not being superstitious, but may be because I was born on a 13th?

Anyway, because of many reasons, the financial hardships included, I suffer from insomnia.

Some times I sleep with the TV on, which again, all experts, me included, would tell you is a bad habit. And it is! Especially if in the middle of the night a woman’s voice crying for your help to donate only .66 cents a day to SAVE an animal, awakens you. Hmm .66 cents a day is nothing to save a dog or a cat. But WAIT!!! Remember my post about The Art of  Chunking? This is a perfect example. Take .66 cents a day and x it with 30 days (a month. Your donation is suddenly $19.80, lets calculate the yearly donation (assuming ALL months are 30 days) 19.80 x 12=$237.60 So, if you were told by the soothing voice on the TV commercial to give $237.60, what would have been your reaction? And I am not going to put words in your mouth or suggest what it might be, because I don’t know you. THIS POST is an opinion, MINE!

I was intrigued by the many TV commercials paid by charities, the nonprofits and just because clearly I have nothing better to do, I researched the topic and came across an overwhelming amount of information. A substantial part of it, the controversy about NONPROFIT CEO’S making compensation packages (including their salaries, benefits, pension etc) of over a MILLION a year!) Is this right, is this wrong? Hmm … lets see who makes what and could we really know where our donations go?

First I read an article entitled ” Where Your Donation Goes? Top Salaries of Non-Profit Companies” by Mark Hrywna 11/1/13 http://www.thenonprofittimes.com

The analysis was based on the IRS Form 990 for the financial year ending 2012. The organizations are rated by total revenue but AT LEAST 10% MUST COME FROM PUBLIC SUPPORT (THIS IS US, THE DONORS)

I am not going to go through the entire list, but just mention that the Y came in first for 6 years in a raw, with a combined revenue of $4,556 BILLION ($827 mil in public support and $614 mil in government support) 

United Way, which provides grants  and help for MANY other non-profits, came  in 2nd. The largest recipient of United Way help being RED CROSS  with a total revenue of 218 Billion, followed by Boys and Girls Clubs of America and Salvation Army and the YMCA.

The total revenue represents a combination of: Public support, government, program services, investments and other) 

But this does NOT tell me the salaries of the CEOs. All it does, is tell me that these recognized fine charities have a lot of money. Good for them and those they help!

Then I came across Top 10 Salaries for non-profits

The Fiscal Times-Overpaid nonprofit Executives

The number one, with a total  yearly compensation of 2.5 mil came someone I didn’t know. L. Hoagland, Chief Investment Officer at William and Flora Hewlett Foundation. They give grants to cultural and educational Institutions. Okay, good for him, he must be an investment wiz!

Number 2 on the list is a charity I know, a charity to which I donated because my mom died of cancer!

John Seffrin, CEO of AMERICAN CANCER SOCIETY  has a compensation package of 2.1 mil, of which his yearly salary is $561,927. NO COMMENT but from now on, if I have money to donate, I will go directly to a local research facility to make sure my hard earned money goes where I intend it to go.

And NUMBER 3 on the list of overpaid CEOs a woman! Well, my womanly heart melts. I am happy for her. In fact, who cares there is still a huge gap between what men and women are paid for same jobs, ONE of us, and of course Oprah, managed to overcome all standards and hardships! Roxanne Spillett, President of Boys and Girls Clubs of America, comes as #3 paid with a yearly compensation of 1.8 mil. and base salary of $455,829. However, I have to give it to her. She has been with the company for 30 years, she worked her way up, up and up.

What is the real problem? (as I see it)  The real problem is our assumption, as insignificant donors, those who give .66 a day that our insignificant donation goes to that poor cat or dog in the TV commercial. We, do not understand the inside workings of corporate America, this is why WE don’t make millions, yet donate!

The truth is though, leaving aside our personal emotions, hopes and bias, IF these CEOs are financial experts and the BOTTOM line is a better return and they and ONLY they do such a fantastic job at investing your .66 cents and triples it for the cause for which you donated, then there is NO problem. The question is what is the BOTTOM LINE??? and are these CEOs the ONLY ones qualified to do the same jobs? I really don’t know…but was curious enough to research and write this post.

The answer was expertly answered in Forbes -Personal Finance 1/23/13 Is A One Million Dollar Non Profit CEO Salary As Bad as It Sounds?

If you donate to the American Cancer Society or the Museum of Fine Arts, Huston or any of the other 18 charities the “Chronicle of Philanthropy” reported as having CEO’s Making a million and more, I’d be even more curious…

The same Forbes article mentions that many states tried to introduce legislation that would CAP salaries of non-profit organizations: NY, NJ, Florida and Massachusetts.TRIED is the key word, because the battle is still on! No such legislation passed. Although, frankly MA wanted a salary cap at $500,000… not too shabby is it, for a non-profit? Well Florida, what’s wrong with you? They wanted to cap a non-profit CEO’s salary at $129,972. Ridiculous for the CEO of a nonprofit!!Isn’t it? Oh, you work for Walmart… sorry! That is for profit. And yes, I shop there. I am too poor to be politically correct when it comes to food for my dogs, I go to Walmart.

Back to non-profits! An interesting point of view was expressed by Dan Pallotta, author of  “Charity Case” which was cited in the Forbes article. His argument is that all that counts is the bottom line… Our donations do not necessarily go DIRECTLY to the CEO’s million dollar compensation. NO!!! Pallotta’s argument is that an effective CEO will “MULTIPLY” the initial investment that ultimately will increase the MONEY RAISED for the REAL CAUSE! Remember, the poor kitty and the dog, and the children in Africa for which you donated .66 a day, actually $19.80 a month?

In other words if the CEOs paid  a million PLUS increase the bottom line, it is okay to be paid for their unique expertise in fund raising and  unique financial competency. 

I agree, but it took me two days to try and understand and figure out what is what. Also the CEOs come and go. For instance, in May 2013 the ASPCA hired a new CEO to replace the one whose salary was over $500,000 a year. Everything changes fast and who has the time to break down exactly where your donation goes? Of course, you, the one who donated your .66 cents a day, have the picture of a child you helped or a cat you saved.

It is a free country and as with everything else each person donates how and where they see fit best.

I personally, decided to make my donations directly to the source intended. I love dogs. I rescued dogs, so I go to the rescue Molly’s Place in Mechanicsburg, PA, from where I got my companions and bring food and money I know will go to transporting animals to safe no-kill shelters and foster homes. I make it easy and simple for everyone!

It is the small non-profits, run by people who put their monetary second to the cause that need help. So, I concluded, I am too lazy to navigate the way my .66 cents is used in a large nonprofit and only give to my local, small charities.

But remember the beginning of the post? I am not a rich person…yet!

1 thought on “Nonprofit Organizations, The Salaries of Some of Their CEO’s and Our Donations — An Unbiased Opinion

  1. Pingback: Nonprofit Organizations, The Salaries of Some of Their CEO’s and Our Donations — An Unbiased Opinion | rodicamihalis.com

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