One of the nation's most popular charities, The Wounded Warrior Project, is now in damage control after several news reports about exorbitant executive salaries, bonuses, and millions of dollars in travel expenses. The board of directors of the organization met earlier this month and fired both the CEO and COO. CBS News reported that the organization was spending a whopping 40 to 50 percent of donations on overhead, while other similar organizations were spending in the range of 10 to 15 percent.
One of the issues raised for public discussion were the salaries of top executives. According to the most recent IRS 990 available, Nardizzi received annual compensation of $496,415 and Giordano $424,329. I believe these salaries are outrageous, but surprisingly enough, within the world of non-profits you will find many worse examples. You might start feeling like a chump if you have been making donations to a charity that is paying its top executives an annual salary of ten times what you earn in a year. Charity Watch publishes a list of top non-profit salaries. The list includes some jaw-dropping pay packages like the CEO of St. Jude's Children's Hospital at $1.3 million, the CEO of The American Heart Association at $1.4 million, and the $1.1 million for the CEO of United Way Worldwide.
If you want to be a smart donor, the two top sites for digging into the finances of a charity are Charity Watch and Charity Navigator. Enormous salaries are usually justified in one of two ways. The first argument you will hear is that it is only a tiny percentage of the overall operating budget. Others will defend bloated pay packages by suggesting that a compensation committee has done an analysis and concluded that the salary is similar to what the executive would earn in the 'for-profit' world. These are both highly specious arguments (and frankly, from what I have seen, many of these highly compensated non-profit CEOs would not last long in the for-profit arena).
Do your own research and you will quickly discover that at organizations where top executives are receiving enormous salaries you will find a cadre of vice presidents, assistant vice presidents, area directors, and other such positions just a step or two down the compensation ladder. You will also on many occasions find relatives (such as a spouse) taking a second big salary back to the same household.
If you are interested in checking out a Christian charity, you can use the two organizations above and additionally look to a rating service that focuses on faith based organizations like The Evangelical Council For Financial Accountability.
If you want to quickly check out how much a charity is paying its top executives, just do a simple Google search using the charity's name and 'IRS 990.'
The article above from The Street.com is one that I have brought up on my radio show on a couple of occasions. I have honestly been surprised at the reaction I get on both sides of the issue. Most people are genuinely shocked at the salaries outed in this article, but a not so small minority have been very angry at me. What business is it of mine? Why don't I just keep my big mouth shut? Why should I care if I am not giving money to that organization? Firstly, all of these organizations are operating as non-profits - meaning they don't pay taxes. Additionally, individuals that donate money to them are receiving a tax deduction. For both of these reasons all Americans are being scammed by the net loss of taxes paid to the treasury so that people at the top can become non-profit millionaires.
For me it is all about being a good steward of the money that God has entrusted to me. Honestly, over the years my best charitable investments have been things like buying a neighborhood kid a bicycle, giving a grocery store gift card to someone in need, buying a homeless person a meal, and the like. Yes, the Paris household gives to organizations as well, but as you might imagine, those paying the their top executives enormous salaries don't get a dime of our money.
Jesus had it right when he turned over the tables of the money changers in the temple. Yep, our Lord did this (and it is a great example of righteous and justifiable anger -nothing sinful here). "So he made a whip out of cords, and drove all from the temple courts, both sheep and cattle; he scattered the coins of the money changers and overturned their tables." John 2:15
What level of a salary for a non-profit executive is too much? Please use the comments section below to share your own opinion.
Helping you make the most of God’s money!