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Charities keeping costs low

Charlotte Observer

June 1, 2007


Study: Big local nonprofits run with less overhead than elsewhere

Charlotte's large charities spend less on administrative expenses than nonprofits in 30 other U.S. cities, according to a new study from a national charity-watchdog group.

Charity Navigator studied large nonprofits across the country, focusing on those that accept money from the public.

The 29 charities it studied in Charlotte had lower overhead costs than those of any other city.

"It's just the general marketplace in Charlotte compared to a place like New York City or Philadelphia, where the cost of operating any type of business would tend to be higher," said Sandra Miniutti, a vice president with New Jersey-based Charity Navigator, which ranks nonprofit groups annually on various criteria.

"But some of that can also be attributed to operating efficiencies at the charities."

The Charlotte nonprofits -- ranging from the Humane Society of Charlotte to the Billy Graham Evangelistic Association -- spent a median of 8.5 percent of their budgets on overhead.

That included CEO salaries and office operating costs, but not costs for fundraising, Miniutti said.

Local officials said they were pleased with the study's findings but weren't surprised Charlotte charities fared well.

"Their mission is to get the money back out into the community, not to pay it in administrative fees," said Alyssa Federico, a vice president with the Foundation for the Carolinas.

The study, which is being released today, attributed the low overhead costs partly to relatively low CEO pay at the Charlotte nonprofits. The Charlotte agencies reported a median CEO pay of $105,704. Nationally, the study said, the median is $110,291.

Only five cities reported lower salaries for their top leaders.

Yet the compensation of local leaders varies widely. Some earn well into six figures, making others seem modest by comparison.

Charlotte executive pay in the study ranged from Billy Graham's $406,830 and United Way chief Gloria Pace King's $377,170 to the $45,667 earned by Lucy Bush Carter, head of Friendship Trays. Franklin Graham, CEO of his father's ministry, makes $94,998, the report said.

King wasn't available for comment Thursday. Dani Stone, a vice president with the United Way, said King's salary represents 1 percent of the agency's expenses.

She added that King earns her pay with aggressive fundraising that has helped bring in $415 million since 1994, when King came aboard.

"Gloria is really regarded as a national leader," Stone said, "not only within the United Way, but with nonprofits generally."

By comparison, the head of Atlanta's United Way made $352,090; the head of the Raleigh-Durham area's agency made $193,721.

The pay of Graham and King, like that of many other nonprofit CEOs, is approved by the volunteer boards that help run the agencies.

Miniutti said a six-figure salary isn't unreasonable for executives overseeing multimillion-dollar budgets. She said donors shouldn't pick a charity simply because the CEO pay is low -- especially not if the charity is struggling.

"You have to look at the charity's performance as a whole when you're looking at CEO compensation," she said.

Top Nonprofit Executive Pay

• Billy Graham, Billy Graham Evangelistic Association, $406,830• Gloria Pace King, United Way of Central Carolinas, $377,170

• Michael Marsicano, Foundation for the Carolinas, $298,496

• Margaret Gragg, Charlotte Country Day School, $280,363

• Lee Keesler, Arts & Science Council, $256,219

SOURCE: Charity Navigator

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