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Been watching the Muscular Dystropy Assoication (MDA) annual telethon for years now, as I am watching it today. As I recently completed my MBA, I dug and did a little research on the 'net to see how they are structured, how they are rated as far as use of charitable contributions, etc.
I was not aware, as probably most aren't, that their President and CEO, Gerald C. Weinberg, earns $379,710.00 per year (source: BBB Wise Giving Report for Muscular Dystrophy Association, July 2010) in salary and benefits. For running a charitable enterprise? I'm all for MDA and all that they do, but does this not seem excessive to others, compared to those CEOs that run for-profit businesses and are held accountable to shareholders?
Gimme a break. Seriously, this is one of those jobs that makes you go "Hummmmm....". I could sure use a hummmmm job right now.
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I'm tempted, but I'll refrain from touching that last sentence.
Anyhow, yes, I agree with you. I don't have much money to offer to charities these days, so when I give, I want my money going to its intended destination. I no longer donate to major causes or emergency relief funds without first checking things out online. Oftentimes, money can be funneled through a variety of different organizations and end up going to the same place, so pick the one that works most efficiently (especially for emergency relief) and puts the greatest percentage of donations in the hands of the people who need it, not the CEO's of the nonprofits.
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I understand that many organizations use 50% or more of all contributions for "operating expenses" that include salaries. Years ago, many used up to 75% of all contributions for "overhead." Now I do some research to see which organizations use the least for their own expenses and give the most to those the donation was intended to help. My charitable contributions have dropped as well GG.
"He who never made a mistake never made a discovery." Samuel Smiles
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The percentage of contributions that MDA takes in that goes for things OTHER than overhead (research, programs for those that suffer from MDA, etc.) is relatively low. That's the good news. The bad news is that they took in 190+ million dollars (fiscal year ending December 2009), inclusive of almost a million dollars in federal matching funds. I guess in a way, since the government gave some of our money to MDA, we all gave to charity last year. :)
So while the charity does receive the nod of approval among the likes of charitable companies with a relatively low overhead (Programs: 77% Fund Raising: 15% Administrative: 8%) the question remains: how much is too much for a CEO of a charitable organization?
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What kind of education or experience does it require to be a CEO of a big nonprofit? $380,000 is a lot more than most doctors make after 7-10 years of training (beyond obtaining a bachelor's degree) and a great big tab.
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grammargeek wrote:What kind of education or experience does it require to be a CEO of a big nonprofit? $380,000 is a lot more than most doctors make after 7-10 years of training and a big tab. Remember, it's not WHAT you know....it's WHO you know...
"Savor the fruit of life my young friends, it has a sweet taste when it is fresh from the vine, but don't live too long, the taste turns bitter after a time."- Kor, Dahar Master, son of Rynar
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Some observations:
Anyway, this is human nature at it's worst. It's the same logic that has CEOs of major corporations making literally hundreds of times what the highly skilled team that works for them do, and justify it by the impossibility that they are that talented. Even if they could raise the dead and walk on water that would be a stretch. Greed is greed, and guru worship is nonsense. Look how wonderfully it has worked out for Wall St and our banks.
This case is on a different scale obviously. The person in question is "only" earning 300K. But it's still a prime example of what I described above since this is supposed to be a non-profit. People that work for such organizations are supposed to have a calling. They are by nature altruistic and willing to sacrifice for the goal of the organization. Now, people working full time for such an organization need to eat. So, that the person get's paid isn't an issue for me. But this person is hardly living like Mother Teresa. You bring your talent to such an organization to do good, not to earn a fat paycheck. If you're in it for the cash, dash for the exit, you're in the wrong place!
But, that is human nature after all. The logic of service for others in need is turned upside down in favor of a six-figure paycheck. Don't compare yourself as Chief of a non-profit with CEOs (as overpaid as many of them are) of for-profit firms.
It reminds me of Orwell's Animal Farm: where all animals are equal, until the pigs slowly but surely take more power and privilege and live much better than the rest. Soon All animals are equal, but some are more equal than others.
I've posted here about communism being an impossibility due to human nature. So too is a system of unregulated capitalism: the same desire to get ahead is twisted into amoral greed in the absence of rules. The same greed can even twist the purpose of a laudable nonprofit.
"Be without fear in the face of your enemies. Be brave and upright that God may love thee. Speak the truth always, even if it leads to your death. Safeguard the helpless, and do no wrong". (Knight's Oath, Kingdom of Heaven)
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I have heard some CEOs justify thier outrageous salaries with statements such as "I am responsible for all deeds done by those within my organization, therefore I could go to prison if somebody screws up" and "This is a 24 hour per day, 7 days per week, 52 weeks per year job. I deserve that money based upon that."
To which I raise the BS flag.
First of all, you don't go to prison for something someone under you does UNLESS you had knowledge of it AND failed to prevent or try to prevent it. The only CEOs that go to prison are those that try to cover up felonious acts within their company. You can bet that if it were my butt on the line and I didn't initiate or call for an illegal act to take place, I would be pointing the big finger at the guilty party.
Secondly, let us dissect the cost of labor. Assuming that a CEO gets 8 hours of privacy a day, be it sleeping or otherwise relaxing and not working, that leaves 16 hours per day for work, which equates to 5,840 hours per 365 day year. At a pay rate of just $300,000 per annum, thats still $51.36 per hour before taxes. How many of you make that kind of money for speaking at meetings, attending dinners, etc.? And remember... that is based upon only $300k per year and working 16 hours per day, every day of the year. Based upon a believeable 12 hour day with Sundays off, a person making, oh, say $380,000 per year is pulling in $101.17 per hour ($380,000 / 3,756 hrs per year (12 hours x 313 days). I'd be willing to put up with that schedule (and the accompanying perks) for a lot less than that. Shoot me an offer, MDA!
Again, let me iterate that I do appreciate what MDA does and stands for as an organization. I just think that some of the monies raised could be put to better use.
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Several years ago, I saw some investigative piece on charities that spend a vast majority of contributions on operating expenses. I was shocked when I learned about one well-known charity that has advertisements on TV all the time and spends 90 cents of every dollar on operating expenses. Once I saw the show, though, the fact that TV advertising time and telephone operators' salaries cost a lot of money seemed logical. Now, before I give to any organization, I check it out on a site called Charity Navigator, which rates various charities according to how much of their budget goes to programming and how much goes to operating expenses. They list budgets, CEO salaries, etc.
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