The Nonprofit 1 Percent

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

There is no date listed for the meeting, but the tax form is signed by Morse as president/CEO on December 4, 2011—two months after the Daily News article came out and embarrassed the organization. Did the board set his pay so "low" compared with the previous year after the article came out and because of it?

The Guild would not answer the Voice's question on this.

To be fair to Morse, There are many 1-percenters leading nonprofits and tax-exempt religious organizations.

In 2009, some congregants at the Riverside Church rebelled over the pay package of its new pastor, Brad R. Braxton, who had been selected by a search committee. The church offered Braxton a $250,000 salary and an overall annual compensation package reportedly worth $600,000, putting him in the 1 percent nationally, but only the 2 percent in New York. Unable to tame his flock over the flap, Braxton resigned after only nine months.

The Susan G. Komen for the Cure foundation drew more attention to its finances than it probably wanted to when it tried to stop funding projects with Planned Parenthood. According to the Los Angeles Times, Komen CEO Nancy Goodman Brinker was compensated $417,171 in 2010, putting her in the top 1 percent nationally and the top 2 percent in Dallas, where the organization is headquartered.

Brinker's pay is completely normal in the nonprofit world, as she heads an organization that raises hundreds of millions annually. Komen for the Cure rakes it in by slapping pink on everything from races to guns to buckets of KFC (as well as by suing anyone else who uses "cure" in their fundraiser). As the Los Angeles Times reported, "Among charities that take in between $200 million and $500 million each year, the average chief executive salary is $430,000, according to CharityWatch."

But what of a nonprofit where the work is with the destitute, and where the bulk of the money comes not from large-scale fundraising, but from government sources? Homes for the Homeless is a nonprofit in the same building as the Voice. In 2009, according to tax records, it received $19,531,261 of its $20,388,962 revenue (about 96 percent) from government grants. A fancy car can often be seen outside our building waiting for the CEO, Ralph Nunez, who, according to tax records for the organization the same year, had a total compensation package of $463,291—which has him in the 1 percent nationally and slumming it with the top 2 percent in the New York metro area.

When Barack Obama ran for the presidency, he encouraged Americans to follow his example as a young man and work as community organizers, presumably by doing work like Homes for the Homeless, whose mission is to "provide homeless families with the opportunities and support necessary to move out of shelter and live independently." But Obama probably didn't anticipate that such work itself would lead to people making more than he does by occupying the Oval Office ($400,000 a year, putting him in the 1 percent nationally and in the Washington, D.C., metro area).

Why do nonprofit boards pay their CEOs so much? As Professor Bruce Kogut of Columbia Business School explains it, one reason is that "the nonprofit sector wants to attract talented CEOs who also could be hired by for-profit firms. To attract talent, competitive salaries are offered.

"That said, nonprofit management is not the same as for-profit—the salary has less risk (it's not tied to profits or stock performance), and the nonprofit environment is overall less fraught with competition. And it cannot be expected that a nonprofit CEO will be paid equivalently to a for-profit CEO (who bears higher risk)."

Another justification for high salaries is that nonprofit CEOs need to run in circles with big donors to raise big bucks. But as Kogut explains: "This is a bad explanation for high salaries. The Metropolitan Museum of Art offers its head an apartment across the museum that surely facilitates dining with donors—but the apartment belongs to the museum. Similarly, a nonprofit can pay the club fees, etc. Paying a salary to support a life cycle is not efficient and not very transparent as the argument for a high salary."

(Another consequence of having to draw support from corporate fundraising is that it can bind nonprofits politically. Numerous nonprofits the Voice spoke with during Occupy Wall Street's height said privately they agreed with the mission, but could not appear in Zuccotti Park for fear of upsetting their banking donors.)

Kogut, asked via e-mail about Morse's pay in 2009, noted: "An 82 percent increase is surely unusual. To be fair, 2008 was a bad economic year where everyone lost revenue. While losing revenue due to an economic recession may not be reason for dismissal, it hardly constitutes reasons for a substantial pay raise.

Kogut added: "There should be transparent reasons for this pay. A president of a university can make $1 million; however, the budget can be several billions of dollars, especially due to hospitals that a university often runs. So $1.5 million by this benchmark seems high."

There's also the issue that the Guild gets a great deal of its money from tax dollars. Might it make sense to compare pay of CEOs of government-bankrolled nonprofits to government salaries? Like Homes for the Homeless, the Guild is largely in the business of processing government funds to provide social services. It is, in essence, a government contractor. And the point of contractors, we're always hearing (even though it's often shown to be untrue), is that they'll lower costs by introducing competition.

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26 comments
Boo_Bottoms
Boo_Bottoms

Typical liberals... ripping off the Taxpayers and the these poor people. No wonder they support the Magic Negro.... it's like printing money.

F'n Joos are either stealing through the Banks or social programs like this... money is their God!

Larry Marsden
Larry Marsden

Even the nonprofit organizations are doing the wall street hustle!!!

Ymgscoringhigh
Ymgscoringhigh

Wow, do people still believe that "non-profit" is really not profitable. Come on people, Trillions of dollars are donated around the world, yet we still have hunger, people are still homeless and poor residents roofs still leak. It's a bigger scam than politicians and these people get praised for the "WORK". Of course they have great big marble mantles to put all their do gooder awards on. Why be a politician at all, just start a non-profit.

Hamilton55
Hamilton55

You are absolutely correct....I cringe when I hear someone say, here's a problem/ need let's start a program or NFP.

Dean Michael Mead
Dean Michael Mead

It took a while for the public to catch on to what is going on at the Guild. They killed a phenomenal early intervention program for blind children under 4, many of them multiply handicapped as well. Why did they kill it? It wasn't profitable. Hold on a second, isn't that concept inherent in the mission of a not-for-profit organization? They do the things that private business won't do because they're not profitable activities.

Stealinghope
Stealinghope

i feel that there ought to be in addition to (1) for profit and (2) not for profit organizations there ought to be a third category: (3) not for profit, my foot organizations ... as evinced herein (this article) and other places there are many people at not for profits who do quite well financially, including, but not limited to 'development' (fund raising) people who sometimes get a percentage of the take. one example of a 'renowned' organization (MSKCC) whose non pareil raison d'etre (and mostly selfless employees) is at times in variance with their tack and actions: “Sloan is pursuing a systemic approach to reducing expenses and increasing revenues […] One example of this is discouraging terminally ill patients from seeking initial treatment or second opinions from the cancer center […] the admission of such patients is counterproductive […] to Sloan Kettering.” [paraphrasing salient features, MSKCC, CFO/Chief Financial Officer] ... there are also instances of craven self servitude at MSKCC conducted by people who drop their moral compasses, yet clearly know better. another example is the aids vaccine ride of perhaps ~ 15 years ago, multiple sponsored city to city 3 day ~ 300 mile bike rides that required relatively large sums of funds to be raised for the cause by participants, but when all was said and done, perhaps ~ 14% of accruals went to charity. That's just not right.

Stealinghope
Stealinghope

There ought to be 3 categories of business: (1) for profit; (2) not for profit; (3) not for profit, my a** ... as there are many at not for profits who make a lot of money ... including beggars in three piece suits (a Paul Fussell [Class] term) a.k.a. 'development' people. Take for example the 'renowned' MSKCC ... “Sloan is pursuing a systemic approach to reducing expenses and increasing revenues […] One example of this is discouraging terminally ill patients from seeking initial treatment or second opinions from the cancer center […] the admission of such patients is counterproductive […] to Sloan Kettering.” [paraphrasing salient features, MSKCC, CFO/Chief Financial Officer] ... at that Institute whose raison d'etre is indeed non pareil and most of whose employees are selfless there are unfortunately individuals (suits, non-clinicians, etc. ) who attempt to influence enrollment in clinical trials in variance with a clinician's intuition when very large milestone [clinical trial phase completion dependent] royalty payments lay in the balance. In addition attempts to expand by that institute have been described as bullying are framed by the bizarre facilities management and infrastructure problems that are swept under the rug. These include but are not limited to chronically exposing its workers to poison (carbon monoxide) [resulting in abandonment of a building after firstly dispatching selfless employees who rightfully complain about safety issues on pretense], knowingly not installing ductwork controls in a laboratory building and other egregious oversights that stand to affect and have likely effected reaction conditions of experiments that may result in clinical trial candidates. the following citation is but one example: http://www.osha.gov/pls/imis/e... ... Ariad stock once increased by 100x (10,000%!!) in perhaps a 4 month time frame. Are YOU an Ariad millionaire? Were you in on that? MSKCC's incumbent President is currently involved in his own he said/she said (IP) Intellectual Property imbroglio. The disingenuousness that emanates from that Institute is intermittently palpable, and those who commit conflict of interest, ethics, environmental health and safety lapses clearly know better.

Bk
Bk

I spent five years working for one of the most well-known non-profits, and the experience led me to the understanding that one should give a charitable contribution ONLY to a direct service provider. Those large, national paper tiger non-profits all have overpaid mouthpieces, be they execs, boards or consultants. As with most things political, grass roots is where it's greener, donation-wise.

Hmmmm
Hmmmm

Occupy is funded, run, and promoted by non profit crooks.

tampajohn1
tampajohn1

Occupy is right on ---time to do a lot of readjustment $$$$$ - and get rid of these crony ". Not for profit" crooks. United Way - same con game --March of Dimes same con game. It is a national con game and the insiders know it. Wake up America!

NirzwanB
NirzwanB

the courts should take the money and belongings of that evil person and do something good with it to make up for this.

Raydog1973
Raydog1973

The thing is most of these non profit presidents probably come from money in the first place. In my expericnes nonprofit leadership is filled with the blacksheep of rich families who dont want to be surrounded by all that wealth than end up making the same amount of money in a nonprofit enviorment

Gues
Gues

Why didn't this article mention the organization's Board of Directors, and their responsibility to run the organization in a fiscally responsible manner? They are the ones that approve the budget, including the President's compensation.

Datebi
Datebi

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car movers
car movers

not everything is money, there are something called values and you have to stand for that. Morse is type who don't care about it and its his failure no matter how much he earns

Datebi
Datebi

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Paula
Paula

I heard the Alzheimer's Association is also like this.

Alexandra
Alexandra

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crookedE
crookedE

Morse should take a lesson from his own (former) employees - sometimes you do work for reasons other than money.

zagfooo
zagfooo

See now that is exactly what I am talking about dude. WOw.Total-Privacy dot US

alvise giglio
alvise giglio

OMG! Alan Morse is the scum below the pond scum in the septic tank in my yard. What a heartless bastard!!

msbpodcast
msbpodcast

Alan Morse is a rich prick without a conscience.

When the zombie apocalipse comes, I hope he is not one of the first to go.

I want him to suffer.

Maybe they'll just eat his eyes and keep the rest of him as a larder.

 
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