• October 25, 2014

Senators Call On Boys & Girls Clubs of America to Justify Pay and Spending

Chuck Grassley

Sen. Charles Grassley, the Iowa Republican, is a key member of the Senate Finance Committee.

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Sen. Charles Grassley, the Iowa Republican, is a key member of the Senate Finance Committee.

Four Republican senators have asked Boys & Girls Clubs of America to provide details about what it spends on executive compensation, lobbying, perks, travel, and other items, saying they are concerned about “a top-heavy organization demonstrating questionable management of hundreds of millions in taxpayer dollars and charitable donations.”

The senators­—Tom Coburn of Oklahoma, John Cornyn of Texas, Charles Grassley of Iowa, and Jon Kyl of Arizona—said they wanted the answers so they could consider changes to Senate legislation that would provide $425-million to the youth organization over five years.

In a letter to Robert J. Bach, the Boys & Girls Clubs board chairman, the senators said they were troubled by some of the group’s expenses at a time that it reported a $13-million loss on its 2008 Form 990 informational tax return.

The senators complained in a press release that the organization’s president, Roxanne Spillett, earned more than $900,000 in compensation in 2008, “even while local boys and girls clubs nationwide close their doors due to budget shortfalls.”

They also asked about reported spending that year of more than $4-million on travel, $1.6-million on conferences and meetings, and more than $540,000 on lobbying.

The Senate legislation, S. 2924, which has been approved by the Senate Judiciary Committee, would reauthorize through 2015 an annual grant that the Boys & Girls Clubs of America receives from the Justice Department. The original program was set up in 1996 to help the group establish new clubs in “public housing and other distressed areas.” But the new legislation says the money should go to improve the quality of educational, health, youth development, and other services at both new and existing clubs “with special emphasis on reducing high school dropout rates.”

The senators criticized that change of focus, saying that Congress originally intended to provide seed money to start clubs in neighborhoods that especially needed them, but now would be providing “a perpetual source of funds to sustain the Boys and Girls Clubs.”

According to the group’s 2008 Form 990, Ms. Spillett earned $988,591 in pay, bonuses, benefits, and deferred compensation. She earned $510,744 in base pay and bonuses—compared with a median of $361,538 in The Chronicle’s survey of executive compensation at more than 300 of the country’s biggest charities and foundations that was published last October.

The Boys & Girls Club of America, in Atlanta, said in a statement that Ms. Spillett, who became president in 1996, had presided while the organization doubled its revenue and the number of young people served.  It said her base salary of $360,774 in 2008 had not increased since 2006 and that the board had authorized $150,000 in incentive pay based on performance.

The group said its board's human resources committee worked with an independent consulting firm, Mercer, to assess the marketplace in setting Ms. Spillett's total compensation. Mercer "found that it was consistent with prevailing and current market practices of similarly situated national nonprofit organizations," it said.

The travel expenses cited by the senators covered the activities of more than 350 national staff members "who make thousands of visits to local clubs, providing consulting and technical support year round," it added.

The group said it had fully complied with all government rules since it began receiving federal money, including an annual audit. It said almost 92 percent of the grant it received in 2008 was passed through to local clubs.

Other senators have a more positive view of the Boys & Girls Clubs. The bill approved by the Judiciary Committee calls the group “a positive force in the communities it serves” for more than 100 years and praises its work in schools, public-housing sites, and Native American land. Further federal spending would help the group continue its efforts to cut crime, drug use, and obesity and improve educational and job opportunities for young people, it says.

It notes that the organization has grown from 1,810 clubs serving 2.4 million young people in 1990 to 4,387 clubs serving 4.5 million young people today.

 

Comments

1. dcspacone - March 12, 2010 at 02:53 pm

Here we go again! These runaway Non Profits with their exorbitant executive compensation and spending make me as sick as the For Profit organizations. Somebody needs to reign in this reckless get rich at all expenses mentality.

2. rparker - March 12, 2010 at 02:53 pm

I would like to see the name of the Human Resources consulting group and hope this Senate subcommittee investigates all of its nonprofit clients. They got the contract because they benefited the President. This is similar to the gang of big corporation CEOs sitting on each other's Boards and voting in huge raises for one another, even though the companies were failing.

3. mattmcburnie - March 12, 2010 at 03:10 pm

I disgree with the review. It's interesting to me that government officials who annually agree to a deficit budget are scrutinizing ANY other organization's fiscal responsibility. These are the same officials who have a guaranteed pension and numerous perks. They need to keep their paws off of it. If the donors have access to the info (and they do simply from GuideStar) then let the donors communicate their distaste for executives who MAY make too much.

I look at it quite differently-- if there is a multimillion dollar, national organization, it requires the very best in executive leadership. We don't want that level of executive to exit not for profit leadership. This is a time when we need that level most. And I'm certain that this is already a pay cut for a similar, private sector job these executives could have instead.

4. jknowles - March 12, 2010 at 03:28 pm

I totally agree with Matt. You don't see Grassley investigating the $4 million salary paid to the head football coach at nonprofit USC, or David Beckham's $50 million a year for kicking a soccer ball around, but God forbid an organization trying to help kids should offer a competitive compensation package...and we wonder why we're not achieving social change.

5. rparker - March 12, 2010 at 03:37 pm

No. 1 - Who is to say these greedy CEOs are the very best in executive leadership?

No.2 - Why would anyone introduce David Beckham into a issue like this?

It sounds like two lobbyists have joined the conversation. Some actually consider the Chamber of Commerce a nonprofit.

6. padch - March 12, 2010 at 04:14 pm

I find it interesting that Texas Senator John Cornyn is calling on the Boys & Girls Club to justify their CEO's 500K salary when just two years ago right in his state's own back yard nonprofit UT Southwestern Medical Center CEO's enormous salary was exposed at over 1,166,000 million annually along with trips to Europe, $160,000 in wines, $30,000 in flowers and it goes on...

http://cbs11tv.com/local/ut.southwestern.kern.2.659842.html

This above story however quietly went away and never a peep from the Texas Senator or the other three senators mentioned above...I wonder if the fact that some of the wealthiest Republican Texans use UT Southwestern for their medical care and that none of the four named senators above had to spend their after school hours at a Boys & Girls Club has anything to do with it. I agree with Matt above that we want top level exectives at nonprofits and we certainly want them at social service organizations.

7. leapingstone - March 12, 2010 at 04:43 pm

Yikes! Good points made by Matt and padch. I cringe whenever a story like this surfaces. LeapingStone www.leapingstone.org is a grass-roots nonprofit that works on a shoe-string budget. No salaries, no perks. Because we are small, we have control on spending. I would hope that if we became as successful as the "big guys", we would still have the kind of ethics that would not allow out-of-control spending -- even if we had the "best people" working with us.

8. shybear309 - March 12, 2010 at 04:45 pm

The question we really need to come to grips with is whether the nature of the nonprofit enterprise in America requires a sense of mission and commitment to it by everyone in the organization. So many nonprofits have gotten so large and involve so much money they no longer resemble the nonprofits that began this movement. The large, institutionalized nonprofits are in reality little different from their large, institutionalized corporate relatives. What we really need is a review of what nonprofit means and perhaps, as some have called for, a segmentation of the nonprofit community and different treatment of the mega-million nonprofits and the more modest enterprises.

9. advocate74 - March 12, 2010 at 06:04 pm

So what do people feel is an exceptable salary for someone who oversees a National office, 4 regional headquarters, 4000 Club sites serving more than 4 million youth? Compensation should be based on the responsibility an indiviudal takes on. Non-profit or not it is a corporation and i can guarantee you that individuals in similar positions in the for-profit make a lot more. It appears that her leadership has increased the organizations ability to serve youth by more than double based on the organizations history.

In regards to shybear309. Unlike many non-profits, Boys & Girls Clubs are federated, meaning that the individual Clubs come together to develop the standards and practices that the National office enforces. This means that there is no dilution of mission becasue the mission is coming from the neighborhoods and communities the Clubs are in. That said, without the national office helping to develop quality programs and provide vast marketing, HR, and training resources, the local clubs would not have the level of impact that they do now.

10. msopher - March 13, 2010 at 12:17 pm

I'd like to see the same disclosure of wages, expenses, bonuses, retirement plans, etc. for United Way. Locally, they control what nonprofits get for funding and the nonprofits pay low wages and most don't offer benefits yet United Way employees are paid extremely well and have benefits that nonprofit staffers don't even dream about. Who is overseeing how United Way pays their staff?

11. jblair - March 15, 2010 at 05:44 pm

I think there are a couple of issues embedded here - one is systemic - how do we benchmark for purposes of compensation and benefits those nonprofits that do receive government funding and are therefore reasonably subject to government review? The second issue is a function of the implications of the first - which is, if we are to apply this standard of accountability to nonprofits that are in receipt of public dollars - essentially in many cases operating as an extension or at least a subcontractor for public services of one sort or another, then why aren't we holding all government contractors accountable on the same issue of compensation and benefits - private as well as nonprofit?
Last comment...so long as we move on these matters with more than an intent to grandstand, I can tolerate the questions being asked and answered (with respect and an assumption of good intentions).
Jill Blair, Seattle

12. awsmithjr - March 16, 2010 at 04:03 pm

What is missing here is more clarity about how the Board (and Mercer) determined that Ms. Spillet's compensation was reasonable. The SEC is now requiring very specific information in this regard from for-profits, and if the Senators investigating this were wise -- or if the Board has nothing to hide -- a lot could be learned (and much of this argument put to rest, one way or the other) by revealing the peer group nonprofits on which the reasonableness opinion is based.

13. stopforeclosurehelp - April 12, 2010 at 01:36 pm

The expenditures details reported are totally outlandish. Executives for companies that receive government funding should not be at liberty to spend wildly, especially in today's economic climate.

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