Do charity's CEO salaries influence which ones you give to?

[O2Bfree]

DH and I are updating our wills, and want to add a sizable contribution to a charity in the event that we die at the same time and certain family members are also no longer around.

I was thinking St. Jude Children's Research Hospital, but then noticed that its CEO's salary in 2010 was over $1.3 M. Wow! and that's not nearly the highest. The CEO of Memorial Sloan Kettering Cancer Center pulled down $6,700,703 according to this site:

https://www.charitywatch.org/top-charity-salaries

I didn't realize that CEOs of such institutions made that much! That's sort of soured me on St. Jude. What do you folks think about withholding contributions from charities that pay their CEOs so much?

 

[athena53]

Not really- it's a demanding job. I'm more interested in the overall % of contributions that go to actual programs and the quality of the work the charity does. A friend from church whose daughter had a really tricky surgery at St. Jude's (they removed a brain tumor using an approach that saved her eyesight when other places wanted an approach that might have left her blind) raved about the quality of the care.

 

[LOL!]

No. The CEO salaries don't bother me.

I used to work for a non-profit. I was schmoozing potential donors all the time. For these CEOs, the job is practically 24/7 and mostly about who they know that can give the big bucks. They also donate a lot of their own money to charity.

 

[ExFlyBoy5]

For me, it really depends on *what* the CEO has to do and how his salary compares to a private/similar industry. I pulled up the CEO of my favorite charity and it's in the neighborhood of $480,000 (or 0.68% of expenses) and I think that's more than reasonable. I am really more interested in the overall % that goes TO THE PROGRAM. My charity spends 91.3%...as a comparison, the American Red Cross is 86%.

 

[Aerides]

I agree it's more important to look at overall percent spend of contributions. A good CEO also is a marquis selling point, and their name and networking are a big part of the attraction.

IOW, if that 1M CEO means the charity pulls in an extra 50M, vs. a no-name 100k CEO who can cajole an extra 1-2 mil, then that's a factor.

 

[brett]

Yes. We look at exec. compensation and at admin as a percentage of total budget.

We reviewed our giving a few years ago based on a magazine that publishes stats on Canadian charities every year.

We looked for percentage of our monies that actually went to where they should. We stopped giving to a number of organizations who had admin overheads as high as 55 percent.

When we give, we want the money to provide just as much value as the money we spend in our personal lives.

 

[RunningBum]

I look at the overall efficiency of charities I give to, how much of my money actually goes to the cause vs. how much goes to overhead such as executive salaries, advertising, and other administrative costs. Non-profits have to compete with other companies for talent, and they can't offer stock options or profit sharing. $6.7M salary would bother me but I'd look at a bigger picture. I haven't actually established any rules yet but I'm trying to figure it out. I don't just blindly give without checking. I was looking at a non-profit that does work on macular degeneration which my dad has and I'm at risk for, and IIRC a place in Boston looked terribly inefficient on how much money went for actual research.

 

[ocean view]

I volunteer in the finance department of a large local nonprofit. At first I was shocked at the salaries of the upper management that I saw. But then I looked at their ratio of donations used directly for their cause, for them it is 96% of every dollar, and realized that is an excellent score. Also they pay that high comp in order to attract & retain high quality executives in a very HCOL area. They couldn’t be successful in their cause if they had crappy, no talent executives running the show.

 

[Texas Proud]

It is not only the salary that can be a problem....


Years ago there was an expose on a charity hospital here... they spend a TON of money on the execs and board members that did not show up in their salary...



IIRC, the charity was also making a profit of $25 mill a year or more...


I would suggest that these are not 'non-profits', but they should be called tax exempt organizations.....

 

[mamadogmamacat]

CEO salary per se does not bother me, for all the reasons already stated.
Percent of donations going to programs does interest me, but also transparency, as over time there can be abuses without openness and a willingness to provide enough information to contributors.

Another point is that smaller charities can be the best use of our contributions, especially if there is a local connection.
An example, my church chooses to support the Lingap Center in the Philippines. 100% of contributions go to program support. Unusual in that the board of directors take no salary, and that includes the one who is a church member. All administrative costs are paid by board members. It is that rare thing, a true charity in terms of all involved. Could this work with a much larger scale organization, like St. Jude's with much greater costs obviously, since we are talking about care for very sick children, probably not.

 

[Sunset]

It does bother me, once a CEO salary is over $1 Million , especially as they often get lots of extra perks along with the pay.

I suppose it's because high pay does NOT mean high performance, there are plenty of examples of high paid execs that run a company down.
And there are plenty of execs that run very large companies well and they make less than $1 Million.

 

[O2Bfree]

I suppose the argument that a CEO needs big money to build a lifestyle that attracts big money has some merit. William Aramony used that as an excuse during the United Way scandal in the early 90s:

https://www.washingtonpost.com/loca...ory.html?noredirect=on&utm_term=.1f20a18f0bdb

"As president, Mr. Aramony helped United Way annual donations grow to more than $3 billion in 1990 from $787 million in 1970. He was lauded within the group as a “visionary” and a “genius” whose restructuring of United Way saved the charity from dissolution."

[mod edit: copyright]

Transparency, then, is a prime consideration!

 

[ncbill]

I use charitynavigator to determine what % goes to programs vs. fundraising vs. overhead.

 

[Teacher Terry]

I look at the money going to the cause and the big guys salary. About the only big program I give to now is the Salvation Army. We give to small animal rescues as well as small local homeless shelters.

 

[copyright1997reloaded]

I look at the money going to the cause and the big guys salary. About the only big program I give to now is the Salvation Army. We give to small animal rescues as well as small local homeless shelters.

I'm with you. I've shifted my giving away from national organizations (with the exception of the Salvation Army and Ronald McDonald house, of which I used one of their family rooms while my child was hospitalized for two weeks) to smaller local all-volunteer organizations.

Sometimes that takes a bit of extra work, as the money is coming from a DAF, and some really small organizations many of the volunteers don't even know their TID # etc.

 

[mpeirce]

I'm with you. I've shifted my giving away from national organizations (with the exception of the Salvation Army and Ronald McDonald house, of which I used one of their family rooms while my child was hospitalized for two weeks) to smaller local all-volunteer organizations.

This is a good idea, but you still have to watch out. Smaller local charities have their share of scandals too. Our county human society had a crook running it for a few years. Heck, I see stories about PTAs/PTOs with volunteer treasurers who were embezzling the funds meant for playground equipment for the kids.

You really do have to practice due diligence.

 

[athena53]

"As president, Mr. Aramony helped United Way annual donations grow to more than $3 billion in 1990 from $787 million in 1970. He was lauded within the group as a “visionary” and a “genius” whose restructuring of United Way saved the charity from dissolution."

Dayum. That would have saved SO much rah-rah-ing and arm-twisting in Corporate America. One of the delights of retirement is that I no longer have to feign interest in the annual UW campaign. Last year I gave 15% of my AGI to charity- but none of it to the United Way.

 

[Cayman]

A very interesting question with some thoughtful responses by others here.



A few more thoughts:


I look at the type of NP, and make sure the admin and other costs are in line with similar operations. For example, admin costs as a % of total budget for a library will typically be much lower than for a hospital.



Also - In most instances, I want employees of nonprofits to be paid market rates for their work.(!) Charity Navigator is an excellent source of information including key employee salary information (Form 990). There are other important considerations, of course, including non-monetary reasons to support (or not) charities.

 

[brucethebroker]

I would suggest that these are not 'non-profits', but they should be called tax exempt organizations.....

Yeah, and don't forget the other perks offered in many not-for-profits. There can be expense allowances, company cars, paid travel (for "business", of course), and free tickets to sporting events. Execs can use "company time" to make paid speeches. Sometimes, the entire comp package is much, much larger than just the salary.

I agree with the "what percentage goes to the work of the charity" line of thinking, but even that may be deceptive if the income is high enough.

 

[brucethebroker]

Dayum. That would have saved SO much rah-rah-ing and arm-twisting in Corporate America. One of the delights of retirement is that I no longer have to feign interest in the annual UW campaign. Last year I gave 15% of my AGI to charity- but none of it to the United Way.

Right on! As a young middle manager, making $50k, our VP of sales told each of us he expected our contribution of no less than $1000 a year to UW. (No allowance given for the charities we supported then). At the time, DW was a stay at home mom with our young kids. I was the non-profit organization...and could have used that money.

PS-I also have never given to UW once free of the "corporate arm twisting/extortison. If UW is aware of what goes on behind the curtain, and continues their support of fund raising that way, shame on them.

 

[World Traveler]

I agree with a lot of you on this thread. It has always bothered me how much a charity CEO made. I use Charity Navigator to break down expenses. Like many of you what percentage goes to the actual program. I feel charity work should be a calling not an enrichment vehicle. I don’t care how hard they work if your about the compensation find a for profit to work for.

 

[street]

It does effect and my wiliness to give to a charity with to much overhead and salary expenses.

I am on a board of directors for community care foundation and every single red penny given to that charity goes directly back to the health care and related projects in my community. I'm very proud of the work that is done from this foundation.

Most of the work is done by volunteers and we do have 2 paid people and one is a CEO but the local Hospital pays there salary and benefits etc. All other expenses are through the general funds from the hospital.

We give out about 1/2 million plus each year in grants to police, health care, EMT, day care, people that need help in related wellness etc.

So in a small local charity it is something we hang our hat on and very proud to say that every penny you donate goes back to help every age group and your community.

 

[jimbee]

I suppose the argument that a CEO needs big money to build a lifestyle that attracts big money has some merit. William Aramony used that as an excuse during the United Way scandal in the early 90s:

https://www.washingtonpost.com/loca...ory.html?noredirect=on&utm_term=.1f20a18f0bdb

"As president, Mr. Aramony helped United Way annual donations grow to more than $3 billion in 1990 from $787 million in 1970. He was lauded within the group as a “visionary” and a “genius” whose restructuring of United Way saved the charity from dissolution."

[mod edit: copyright]

Transparency, then, is a prime consideration!

Well, inflation over that period was about 3.37x, and United Way contributions increased 3.81x. So he did beat inflation.

 

[Walt34]

Right on! As a young middle manager, making $50k, our VP of sales told each of us he expected our contribution of no less than $1000 a year to UW.

They tried something like that where I worked too, every year, including saying they wanted to see "100% office participation" although there was no mention of a specific amount. I just filled in a "zero" in the amount space and signed it. There, I "participated".

 

[MRG]

Right on! As a young middle manager, making $50k, our VP of sales told each of us he expected our contribution of no less than $1000 a year to UW. (No allowance given for the charities we supported then). At the time, DW was a stay at home mom with our young kids. I was the non-profit organization...and could have used that money.

PS-I also have never given to UW once free of the "corporate arm twisting/extortison. If UW is aware of what goes on behind the curtain, and continues their support of fund raising that way, shame on them.

I delivered auto parts for a year when I was 20. The owner of the parts store was a UW volunteer. Genuinely a good guy who treated us pretty well(except his temper). Health insurance, unlimited sick and disability but... He demanded you contribute your "fair share" by UW definition. I remember telling him I made $2.45 an hour, he reminded me minimum wage was only $2.20 an hour and I was better off than many.

Later in life I was a manager who's Megacorp drove for 100% participation in UW. I met with my team and let them know my definition of participating was filling out the form. Goose eggs counted. Nobody above me cared, no one challenged my merit awards, promotions.