019 DGM – Which Charity CEOs Get Paid Too Much?

Which charity CEOs get paid too much?

Welcome back. This is the podcast that helps you do good even better — regardless of which charities or causes you support. 

This is Ed Long. Each week on this podcast I talk about charities and provide actionable tips to help donors and volunteers to take their philanthropy to the next level and do good even better.

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Main topic

  • Which charity CEOs get paid too much?
    • We’re talking again today about the smart part of Give Smart from Your Heart.Paid too Much?
    • Resource: Charity Navigator 2013 Charity CEO Compensation Study
        • 3,929 charities from the CharityNavigator.org database
        • All with revenues of $1 million or greater
        • Compensation included salary, cash bonuses and expense accounts; excluded contributions to benefit plans and deferred compensation allocated to be paid in future years.
        • Median CEO compensation = $125,942 (basically median = 1/2 are higher, 1/2 are lower).
        • Highest CEO compensation reported in the study = $1.8 million.
        • Key differences based on charity size (based on expenses), geographic region and mission.
        • Geography example from Charity Navigator study

      Size

      Region

      Large (expenses > $13.6 million)

      Medium (expenses $3.5 million to $13.5 million)

      Small (expenses $1 million to $3.5 million)

      Mid-Atlantic

      $267,724

      $161,578

      $112,408

      Midwest

      $236,485

      $131,692

      $87,632

      Mountain West

      $184,609

      $121,717

      $85,160

      Northeast

      $282,636

      $169,008

      $110,436

      Pacific West

      $224,265

      $148,620

      $95,804

      South

      $227,334

      $129,143

      $90,507

      Southwest

      $243,886

      $133,305

      $88,932

    • To be strong and effective, charities need capable leadership. Capable leaders are entitled to be paid fairly.
    • Back in episode #14 we talked about the National Football League. It’s not a charity, but is a nonprofit. CEO Roger Goodell was paid $29 million.
    • Private industry compensation surveys:
    • My take: there are charity CEOs who get paid too much, but they’re a small minority.
    • Which charity CEOs get paid too much? You get to decide, before you donate to any charity, whether you think its CEO gets paid too much.
    • I suggest you focus your giving on five or fewer charities. That puts you in a position to dig in and find out about things like CEO compensation. And avoid making superficial judgments based just on a number.
    • Beware your personal financial set points. And go beyond them.
      • Price of gallon of gas or loaf of bread from back when you first remember
      • How much earned at your first real job
    • Context matters
      • Size (see above table) and stage of charity development. My story “Mom and Pop” charity with $600,000 revenues getting ready to hire a leader for the future; $100,000 was hard, but necessary.
      • Geography: Highest paid in Mid-Atlantic for Small; Northeast for Medium and Large. Lowest paid in Mountain West for Small, Medium and Large.
      • Mission: Highest paid in Education; Arts, Culture and Humanities, Public Benefit. Lowest paid in Religion; Animals; Human Services; Environment; and International.
  • Your smart and easy assignment for today
    • Find out the total expenses of your favorite charity and how much it pays its CEO. How does that stack up against $125,942 or (better yet) the geographic median table shown above?
  • A big part of giving smart from your heart is knowing your top charities well, and that includes understanding their staffing and compensation arrangements.
  • Had experiences? Have feedback? Share your thoughts  in the Reply / Comment section at the bottom of the page. Or email me at ed[@]seriousgivers.org

Episode sponsor

  • Today’s sponsor is the number 125 942. 
    • Our sponsors don’t pay us anything. But they give us a way to talk about a different charity-related concept each week. And help us all grow our understanding of nonprofits and charities.
    • $125,942 is the median charity CEO compensation reported in the most recent CEO compensation study by CharityNavigator.org (see above). Median basically means half the CEOs were compensated higher, and half lower.
    • Remember, you can quickly check the identity, reported revenues and EIN of every nonprofit registered with the IRS at CharityCheck101.org.

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About Ed Long, the podcaster

Podcaster Ed Long has been preparing more than 40 years to do this podcast. He knows charities and the rules that apply to them. He’s analyzed charity finances and operations.  He’s founded and run charities, and volunteered for them. He’s helped the public and law enforcement fight fake charities, and has served as a philanthropy educator and coach. Before all that he worked as a partner with a major Wall Street law firm. Ed is the founder and CEO of SeriousGivers, which itself is a charity. Ed knows the great work that strong charities can do with the resources entrusted to them, and is passionate about helping others find and support strong charities.