The Nonprofit 1 Percent

Even the do-gooders can seem blind to their own excess

The Nonprofit 1 Percent
Scott Schafer; ImageSource / Corbis

When music therapist Debbie Moran was notified she was being laid off from her job with the Jewish Guild for the Blind, her first concern was not the money.

"Me being let go is nothing," she wrote in an e-mail. "The salary was minuscule."

Moran's final paycheck was $165.07 for two weeks, and while she noted "it's sometimes a little more," the gig had no benefits and brought in less than $5,000 a year. It was but one of several jobs Moran hustled up to eke out a living as a musician, therapist, and teacher.

Music therapist Debbie Moran at the piano with the blind GuildCare choir for the last time
Arlene Gottfried
Music therapist Debbie Moran at the piano with the blind GuildCare choir for the last time
From left: Gwen Lee, Dorothy Matthis, Rachel Gonzalez, Daniela Luna, and Vicky McKinney sing gospel at the GuildCare Adult Day Center in Yonkers.
Arlene Gottfried
From left: Gwen Lee, Dorothy Matthis, Rachel Gonzalez, Daniela Luna, and Vicky McKinney sing gospel at the GuildCare Adult Day Center in Yonkers.

Moran had been at the Guild for more than 20 years and worked with mostly elderly blind people, forming various choirs. She was at the Guild nursing home five days a week until it closed; then five days a week at the GuildCare Adult Day Center in Yonkers, and then three days.

Then came word that her program and the GuildCare choir were being axed entirely. "I am in shock but most of all horrified for my people," she says. "They have nothing. They are old, poor, and on top of that, blind. They are totally dependent on Medicaid."

Some had lost their sight entirely. Others with dementia were losing their memories. And now even the day care residents were losing music therapy, which could be, as Moran puts it, "sometimes the one thing that can draw someone out."

Neither Moran nor Maria Claro (who made $38,000 a year), an outspoken aide laid off around the same time, seemed surprised that their salaries would fail to register with the Guild, whose revenues (including affiliated organizations) can go into the hundreds of millions.

At the other end of the pay scale at the Guild, it's a different story. In 2008, the Guild was paying its CEO, Alan Morse, J.D., Ph.D., a total compensation package of $843,502. Then came 2009, the first full year after the financial crash, which compromised the Guild's revenue streams.

Instead of going down that year, however, Morse's compensation went up some 82 percent, topping $1.5 million.

Although he runs a nonprofit, Morse is comfortably in the 1 percent that Occupy Wall Street has made everyone so much more aware of.

In fact, if you use The New York Times' "What Percent Are You?" interactive tool, you'll see that Morse was in the top 1 percent not just nationally, but also in the higher-earning New York metropolitan region, even before his big raise in 2009.

In the nonprofit world, things don't turn out to be so different than in places like Wall Street.

Founded in 1916 as the New York Guild for the Jewish Blind and granted tax-exempt status in 1941, the organization's name was changed to the Jewish Guild for the Blind in 1960.

A February/March 2011 article in The Jewish Daily Forward described Morse as the "head of a charity ranked among the fastest-growing in the nation." It also described the Guild as a modern, nonsectarian organization.

At the Guild day center in Yonkers the Voice visited, most of the residents were black and Hispanic, and they were putting on a gospel concert. A Guild newsletter features a visit from Santa Claus at another center.

"We are a healthcare organization, the largest of our kind in the country, and not a Jewish Federation or social agency," Morse told the Forward in an e-mail. (Through the Guild's PR office, Morse did not respond to repeated interview requests from the Voice, nor to detailed sets of specific, e-mailed questions.)

Like many nonprofits, the Guild's financial model is largely based upon receiving government funds in exchange for executing government contracts (in this case, getting Medicaid in order to facilitate services for the blind).

Or more simply—as several people who have worked there have put it—it's a "Medicaid cash cow."

Before the recession, when Medicaid funding was relatively flush, such nonprofits had incentive to get as many client contracts as possible. According to the Forward, the Guild had grown to 560 employees by last year, with locations in New York, Massachusetts, and Florida.

In addition to centers in New York City and Yonkers, the Guild operated a nursing home in Yonkers until 2009, when, according to employees there at the time, "it was no longer profitable."

"It was terrible," Moran says, when the home was closed, and the blind residents were moved to other facilities. "Imagine you are blind. Knowing where everything is is extremely important. And to lose that, at the end of your life . . ."

In a September 2011 article, the New York Daily News reported that "Michael Henderson, who once oversaw the guild's procurement, claimed he was fired in 2009 after complaining about irregularities. Henderson said the guild spent $100,000 on imported furniture for Morse's part-time White Plains office and he claimed another officer pocketed $100,000 from the sale of guild property."

The Voice could find no court record of any such suit ever being filed. The Daily News says the suit was settled in 2011 and that Henderson died of cancer that same year. Colleagues who worked with Henderson allege that he was fired with the Guild knowing how serious his illness was.

The Guild's day center in Yonkers is located in an industrial park near the Hudson River. Its clients, with various levels of vision, hail from the Bronx and Westchester County, many of whom are picked up by the Guild. Cognitively, they span from extreme clarity to dementia.

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