Published April 11, 2007
 
 
DOV TALES
by Dov Burt Levy
 
  Issue: 8.03
 
How Do We Judge NPO CEO Salaries?
e-mail me
 

It's chutzpah, if not perversity, for Newsweek magazine to list and rank the 50 most famous rabbis in America, titling the story "Choosing the Chosen." The Newsweek staff didn't write it; instead the editors allowed three well-placed Jews in the media to choose the criteria and make the selections.

Perhaps neither the three Jews nor Newsweek know that selecting the 50 most famous rabbis is like mixing matzah and bread (particularly bad at Passover). Rabbis do many things; some teach, some write, some preach, some are in the kosher food or Kabbalah business.

Nevertheless, Newsweek named Rabbi Marvin Hier, head of the Simon Wiesenthal Foundation, America's number one rabbi. Most of us know Hier from his well-received films or from those large envelopes asking that a pro-Israel petition be signed and sent to the United Nations, with a donation sent separately to his organization.

I checked the rabbi selection story at The Forward to see their take on the matter. There I found a letter from a reader, David Amitai, who wrote "It is shameful that Rabbi Marvin Hier and his family [wife and sons] earn a million dollars a year from the Simon Wiesenthal Center. This is an exorbitant and excessive amount from a non-profit charity institution dedicated to preserving the memory of the Holocaust. How many people donating their hard-earned money are aware of this?"

That's a serious charge, easy to prove or disprove by checking at www.charitynavigator.com, a website listing thousands of organizations and information provided to the IRS. I did, and here's what I found:

Rabbi Hier, his wife and two children, had combined salaries of $674,090 for the fiscal year ending June 2005. The organization spent $27 million.

Those figures are not the million alleged by Mr. Amitai, but the numbers are two years old and salaries may have increased. Plus, it looks too much like a family business for my taste.

But, while on the charity website, I checked out several other large Jewish non-profits and brought up the following information citing organizational name, person in charge and that person's salary, fiscal year covered, and the organization's budget:

American Jewish Joint Distribution Committee, (Steve Schwager), $354,000, 12/2004, budget $203 million.
Anti-Defamation League, (Abe Foxman), $483,677, 12/2004, budget $70 million.
American Jewish Committee, (David Harris), $408,000, 6/2005, budget $42 million.
American Jewish World Service (Ruth Messinger) $159,650, 12/2005, budget $17 million.
American Jewish Congress (Neil Goldstein) $200,000,12/2005 budget $6 million.
Zionist Organization of America, (Morton Klein), $249,462, 12/2005, budget $2.8 million.

Each of you will have your own ideas about an appropriate salary for the CEO of an organization to which you might contribute.

Some argue for comparative salaries between the business world and the non-profit world.

I don't buy into that. Corporate salaries over the past 15 years have been excessive, sometimes criminal, deadly to the future of the free enterprise system, and, in a word, obscene.

Thankfully, some of the big shot offenders are in jail, some stripped of excessive past compensation, and others facing court challenges. Jewish communal work is a profession by itself, and people have always done it for reasons beyond money.

All charitable giving in America is really big business, with $260 billion donated in 2005.

When that amount is deducted from federal income taxes, in effect the government is giving about one-third of the money. That's everybody's money, too.

Here's my bottom line: All non-profit charitable organizations that enjoy funding from the citizens at large and large tax benefits from the federal and state governments should provide pertinent information on their solicitation materials: size of budget, amount spent on fundraising and administration, amount devoted to programs, and executive compensation, all expressed in terms of dollars and the percentage of the organization's budget.

Like the information found on your food products, this approach would help you see what you are buying and how the group is spending its money. The statistics are important factors determining value received. Still, you will need to look closely to see what they actually do with money given to their programs. Is it useful, efficient, productive, important?

With my net worth and income, you can bet that organizations paying their CEO a half million dollars a year won't be on my list.


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