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CEOs of charities outpace biggest for-profits in salaries, perks

Palm Beach Post

October 3, 2006

 
 

By Susan R. Miller
Palm Beach Post Staff Writer

Compensation for top executives at charities and foundations across the country grew faster than that of CEOs of the biggest American for-profits, according to a newly released survey by The Chronicle of Philanthropy.

The survey found that the median compensation for a nonprofit chief executive in 2005was $327,575, up 3.6 percent from $316,058 the previous year, according to The Chronicle, which looked at 332 charities and foundations. (A median increase means half the raises were higher and half were lower.)

The figure for CEOs of the 500 biggest U.S. for profits was 2.9 percent, according to Forbes magazine figures provided to The Chronicle of Philanthropy.

Bonuses and expenses put Jeffrey Klein, CEO of the Jewish Federation of Palm Beach County since 1986, above the median. His compensation is listed as $327,575 in salary, plus $51,124 in perks.

Klein's salary has steadily increased over the past five years, up from $230,000 in 2001. He declined to comment.

To the south, Jacob Solomon, executive vice president of the Greater Miami Jewish Federation, listed a salary of $300,000 and $129,000 in benefits and expenses. Five years ago, his salary was $250,000.

Sandra Miniutti, director of external relations for Charity Navigator, a Washington-based watchdog group that will release its compensation survey this week, said such salary increases are not unheard of.

"It's a competitive marketplace, and if charities want to retain employees, they have to increase salaries over time," she said.

Susan Galler, a consulatant and recruiter for nonprofits with offices in Miami and Boston, said that when she helps her clients recruit top executives, salary decisions are based on the complexity of the organization, the number of constituencies that need to be managed, the number of employees and the organization's budget.

"There's a mind-set that nonprofits are about poverty. That's old-fashioned. In order to compete, they need to have best practices and people who are at the top of their game," Galler said.

The Chronicle found that more than 40 of the CEOs surveyed have left their organizations. And as Baby Boomers retire and the number of not-for-profits increases, it will be harder to find new leaders unless they are offered competitive salaries and benefits packages.

A study conducted early this year by The Bridgespan Group, a Boston consulting organization, predicted that by 2016, nonprofits will need more than 80,000 new senior managers each year.

Although nonprofit salaries grew faster than salaries at for-profits, they remain nowhere near the for-profit median of $2.4 million in salary and bonuses, according to a new Forbes magazine survey.

Galler points out that for-profit executives also benefit from being stockholders and receive other benefits that don't exist in the not-for-profit world.

Many donors find high salaries difficult to justify when opening their pocketbooks, Miniutti said, but they are needed for nonprofits to remain competitive.

"In today's marketplace, charities are asked to perform just like for-profits," Miniutti said. "The CEO of a nonprofit typically has to manage hundreds of employees and thousands of constituents. They also need to fund-raise and cultivate donors."

The Chronicle survey looks at both charities and foundations, which skews the numbers a little higher, Miniutti noted.

Her organization's survey is based solely on tax returns. Looking only at not-for-profit organizations, not foundations, it found that the average compensation is about $141,947, including bonuses and expenses. In the South, it's $130,852.

The Chronicle survey found that Lorie Slutsky, president of The New York Community Trust, was the highest-paid CEO of a community foundation at $551,200.

Though the organization was not included in The Chronicle survey, a check of tax returns for the Community Foundation for Palm Beach and Martin Counties Inc. found its president and CEO, Shannon Sadler Hull, made $112,600 and another $6,756 in benefits in 2004, the most recent filing available.

The survey found hospital executives were among the highest-paid. Harold Varmus, president of Memorial Sloan-Kettering Cancer Center in New York, topped the list at $2.49 million.

Also on the list is Harve Mogul, CEO of United Way of Miami-Dade, who received a salary of $347,352, plus $35,500 in benefits and expenses. Mogul also is listed in the survey as having received a $25,000 bonus. The median bonus, according to the survey, was $50,000.

His counterpart, Scott Badesch, president of United Way of Palm Beach County, was not on the list, but a check of the organization's most recent tax return found his salary to be $172,081, along with $27,000 in benefits and expenses.

A check of tax records shows a 2005 salary of $72,411 for United Way of Martin County Executive Director James P. Vojcsik and $62,389 in salary for St. Lucie County United Way President Karen Knapp.

Robin G. Mahfood, president, CEO and one of the founders of Food for the Poor in Deerfield Beach, made the list with a salary of $302,400, plus $12,000 in benefits and expenses. He also made The Chronicle bonus list with an added $2,400.

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