Tuesday, March 27, 2007

Exec Pay

Ugh. I get so sick of this. Some nonprofit executive excess makes the news and sure as the sun rises, the politicians will jump on a need to provide even more regulation for nonprofits.

Today, it's the Smithsonian's head honcho, who "resigned" after $90,000 in unauthorized expenses on private jets and the like. So he's gone, but his legacy will remain.

And, focusing on executive pay in the sector is yet another example of the policymakers going for the popular easy fix. First, the vast, vast, VAST majority of nonprofit execs are way, way, WAY underpaid. You never hear about bringing their pay up to a fair amount, do you? Hey, there's an idea. Let's bring the stratospheric pay down and the underpaid up....

But of course, what's stratospheric? Should ED pay be a percentage of annual revenue? A fee based on outcomes? No more than 14 times his or her lowest paid employee? And, what about cost of living? A dollar goes farther in my town (Springfield, IL) than in Chicago, or New York, or D.C.

I've heard politicians propose that no nonprofit exec be paid more than $100,000 a year. Talk about simplistic, clueless solutions. That would be terrific for many, but a bit of an unhappy surprise for hospital CEO's or most senior administrators at major private universities.

Of course, the truth of the matter is that, to get good people with the high-end mix of ethics, management, leadership, finance, fund-raising and communications skills that are required for most ED/CEO posts, you have to pay them. Even at what seem to be high salaries, these people often work for a small fraction of what they could bring in the for-profit sector, and no one ever seems to mention that.

Anyway, the buzz around the flagrant abusers doesn't help this discussion; it just hardens the perspective of the policymakers that we're all corrupt.

3 comments:

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Anonymous said...

Thanks for your post. The Young Nonprofit Professionals Network here in the Bay Area just had a discussion on our listserv about "low pay" here at Nonprofits in the Bay Area. This is an important topic that cannot be ignored.

Heather Carpenter
http://www.aspirationtech.org/blog/nonprofitoperations

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