To be a non-profit executive
Upon reviewing the Sept. 26, 2013 issue of The Chronicle of Philanthropy, maybe it's time parents revisit and bring the nonprofit profession leadership possibilities to the dinner table - and here's why.
The early fall issue of the Chronicle, the principle news organ of the NP development field, publishes a random sampling of 300 or more nonprofit organizations. The report based upon a review of the NP Form 990 Federal Tax filings disclosed how executives had been compensated in the prior year.
What is quite revealing is the fact that the compensation levels of nonprofits, at least at the national level, are quite handsome even though they are still a long way from what senior executives in business receive.
According to the Chronicle, the median salary of NP chief executives was $417,000 in 2012, as compared to $9.7 million for those executives who were included in the S & P 500. However, this comparison is not exactly "apples to apples" and more on this later.
What takes place among NP's outside of Vermont is much different when it comes to the scope, size and executive director compensation. Aside from hospitals and colleges, Vermont, has few NP's of any size among its 8,000 registered NP's. Examining the financials of national/international organizations, where hundreds of millions (in some cases billions) of dollars are under management's control - what a different world we live in.
For example, Bob Mazzuca, the CEO of Boy Scouts of America in 2012 received, compensation of $1,781,000, of which a good portion was a retirement payment.
James Clark, who oversees another children's organization, Boys & Girls Club of America, received $658,000, including a $100,000 bonus. In recent years, nonprofits have adopted many of the salary perks that the business world has had for some time - namely, deferred compensation, bonuses, housing allowances, travel, retirement packages among others.
The head of the United Jewish Appeal Federation of Jewish Philanthropies of New York, received $3,151,000 in compensation last year - most of which was in the area of bonus and deferred compensation. For those who may not know what is deferred compensation - it is a tax-planning vehicle to put off paying taxes on compensation income until it is paid at some future date.
Until I read this month's Chronicle I had only known of local/county United Way organizations. I had no idea of the United Way Worldwide, headed up by Brian Gallagher. Mr. Gallagher took down $1,220,000 in compensation last year. As a point of reference, the amount is about twice the dollars raised annually by the United Way of Rutland County.
I note to those parents of daughters who might wish to be candidates for NP executive positions one significant negative factor. NP still hold on to the same discriminatory practices that exists in the commercial world and within other professions - female executives continue being compensated at levels below their male counterparts - even though they occupy over 52 percent of the NP leadership positions.
Another intriguing compensation payment centers around the NP organization known as, Inspirational Network. This TV evangelical broadcasting NP compensates its CEO, David Cerullio with an annual payment of $1,677,399 - along with his wife, who received $100,000. Their son and daughter were not ignored - each took down $100,000. If in fact this type of practice is found to be abusive it will certainly bring attention to the NP sector, not unlike what had occurred a decade ago with the Pennsylvania United Way.
Early on I had noted the wide gap between what CEO's of NP received versus those in private industry, a difference of a factor of 20 times. What was not reported was the scope of operations, large numbers of people employed, competition for customers as well as other factors that exist in the private sector that could in part justify the difference. Whether compensation to NP CEO's and to S & P 500 executives are where they should be, I will leave to the experts to decide.
What is important is that the NP profession is a field of endeavor that should be discussed with the college-bound generation. They can be a part of a worthwhile mission while at the same time be financially rewarded. Tax-exempt organizations make up a large portion of our state and the national economy. NP compensation levels are recognizing that impact and the need to attract capable executives.
Don Keelan writes a bi-weekly column and lives in Arlington.
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