Are some nonprofit executives paid too much money?
The question is front and center for the Internal Revenue Service, some charity watchdogs, and many reporters who cover the nonprofit world.
It is also very much on the minds of some bloggers, especially in the wake of recent stories that question the pay practices at the Citi Performing Arts Center, in Boston, and National Night Out, in Philadelphia.
Lawyer and author Jack Siegel, for instance, tackles the issue regularly on his blog, Charity Governance. Often, Mr. Siegel defends the rights of nonprofit groups to set the pay scales for their top executives — and for those executives to receive a competitive salary.
“We would be the first to argue that the government can set requirements for government subsidy without violating that Constitutional right,” Mr. Siegel writes in a recent post, which discussed the scrutiny surrounding a $1.2-million bonus paid by Citi to its chief executive, Josiah Spaulding Jr. “However, when members of the public and the media attack compensation levels, they are effectively challenging the right of private citizens to organize.”
Nonprofit finance expert Dan Prives, meanwhile, tends to be more critical of such pay deals on his blog, Where Most Needed. Mr. Prives, for instance, questioned National Night Out’s decision to pay its founder $255,000 in salary and $42,000 in benefits in fiscal 2005.
Mr. Prives argues that some organizations overpay their top executives because of cozy relationships between management and the boards of directors.
“The high compensation level of some nonprofit CEO’s is a result of the unequal bargaining power between boards and CEO’s, not a result of arms-length bargaining in a competitive marketplace,” he writes.
Should the public be scrutinizing the compensation packages offered to nonprofit executives — or is salary a private issue that should be left alone? Click on the comments link below to share your thoughts.
To see more coverage of the topic of nonprofit executive salaries, see the Chronicle’s most recent salary survey.
