Nonprofit Lay Leadership "Overvalues" Professional Leadership
I got a recent comment about a situation in North Carolina and we maybe should be scratching our heads or at least try to understand all the positions around the issue.
The CEO in the North Carolina United Way raised a huge amount of money last year (not I assume without the help of her lay volunteers). Her board, likely corporate big-whigs used to big bonuses for being successful, gave a huge bonus in the form of a $800,000 or more increase to the CEO's retirement fund, plus a raise and other benefits which pushed the annual compensation to over $1 million per year.
Now of course the grumbling on the streets is that this is way to much money for a nonprofit exec to be making. And I of course don't like mega salaries for anyone -- I think that for-profit folks are waaay overpaid but that's not what their peers and owners say so it doesn't really matter that I don't like the practice. And no, I don't like huge salaries for nonprofit folks either -- it comes from charitable money after all -- people who want to see their dollars make a difference to the cause, not the CEO pocket book.
But let's look at the other side - big-whig corporate guys get paid a lot and some of them think the principle of paying a lot for big results makes sense. In the case of our North Carolina U.W. CEO it's good to note that Charlotte has some pretty huge companies paying pretty huge wages (Like Wachovia & Bank of America). For sure the nonprofit sector should appreciate that the for-profit folks are viewing the nonprofit sector, symbolized through this payout, as at least being peer-like. And, the sector has been working for this recognition for years.
Do I like $1 million nonprofit CEO salaries - no, not in principle. Do I like that the corporate folks in Charlotte value the nonprofit success stories -- absolutely!
Mike,
I'm not sure if your post refers to a second instance in Atlanta, or if it's really about what happened in Charlotte, N.C. Here's my take on the situation in Charlotte - I first posted this on my blog, www.cfctreasures.wordpress.com on July 1st: (The original story is on the Charlotte Observer website).
The North Carolina United Way Board Failed Both the “Smell Test” and the “Optics Test”
The CEO of the United Way of Central Carolinas was given a huge raise, bringing her compensation up to $1.2 million. In particular, her retirement fund was increased six fold to $ 800,000 which has generated a lot of controversy and prompted this post.
I don’t fault the CEO one bit, if any employee was asked “We plan to increase your retirement fund by sixfold, what do you think?”, the answer of course will be “Great idea, Thanks!”
The failure here is for the North Carolina United Way board to not recognize the negative impact that this would have on the non-profit sector. Don’t they know the United Way history with the Aramony scandal?
If she was owed 8 years of back retirement fund payments, that should have been handled separately as an error correction, not a sixfold increase in her retirement account in one year.
BTW, The Combined Federal Campaign (CFC) is the world’s largest workplace giving and there are many safeguards in place to prevent the type of coercion and pressure mentioned about United Way campaigns in some of the other posts on the Philanthropy.com website.
The CFC is also the most donor friendly, and least expensive way for a charity to raise funds.
In terms of actual giving, if the CFC were a foundation it would be the 10th largest foundation in the US. $1 billion of unrestricted gifts over the past five years — how much did your non-profit receive?
Bill Huddleston
CFC Expert
www.cfcfundraising.com
Blog: www.cfctreasures.wordpress.com
Thanks for the correction Bill, and thanks for raising this issue. I was writing about North Carolina, although I found that the Atlanta UW had made an additional 1.6 million retirement payment to its retiring CEO in 2007.
- MB
Posted by: Bill Huddleston, CFC Expert | July 06, 2008 at 02:16 PM