The battle lines have been drawn in the debate over nonprofit executive compensation.
At issue is Gov. Andrew M. Cuomo”™s recent creation of a state task force designed to crack down on executive payment abuse.
“Not-for-profits that provide services to the poor and the needy have a special obligation to the taxpayers that support them,” the governor said, in announcing the oversight committee. “The use of taxpayer dollars must be scrutinized at every level.”
The push for more oversight was fueled in part by a review of sky-high executive salary and compensation packages.
It”™s estimated, according to New York Department of the Budget numbers, there were some 1,926 nonprofit employees in contract with the Office of People With Developmental Disabilities, Office of Mental Health and Office of Alcohol and Substance Abuse Services, with annual salaries greater than or equal to $100,000.
Total salaries for those employees were the equivalent of $324.6 million, with an average salary of $168,555 per employee, according to budget numbers released in January.
Nonprofit entities like day care providers or nursing homes that contract with the state are more in line to be affected by the task force proposal, according to Catherine Marsh, executive director of the Westchester Community Foundation, a division of The New York Community Trust.
Marsh called targeted oversight “blatantly one-sided.”
“We have no government money coming in here, but it could affect many nonprofits in Westchester and across the state who get a good bit of their money through contracts,” she said. “I”™d have no problem with an executive compensation task force if all contracted agencies are looked at.”
That includes oversight of the taxpayer-supported, for-profit sector that contracts with the state, she said.
Doug Sauer, CEO of the New York Council of Nonprofits, concurred, calling executive abuse a “stain on the sector” that is an injustice to the taxpayer. However, a comprehensive review of any and all government contracts with for-profit businesses should be evaluated if the same is done for the nonprofit, he said.
Marsh is of the mantra, “Where does it end?”
The state oversight committee may even discover a salient point of operations and that is that “Some nonprofits are multimillion-dollar businesses that are made up of different funding sources including government, private contributors, community trusts like us,” Marsh said. “At what point does the government say, ”˜I can dictate this.”™ If someone wants to know where their charitable dollars go to, every CEO”™s salary is online. You have to submit 990s. It”™s all there.”
The announcement of a compensation task force has spawned New York Council of Nonprofits to create a platform for members to vent their angst or to discuss a better way of handling payment abuse.
“We do not believe that executive directors should be paid $100,000 or more to do their jobs,” writes Judy Atchinson, executive director of X-Quest Inc. in Schenectady.
But Adam Kirkman, director of technical assistance at Cares Inc., called the announcement “offensive.”
“Where is the probe into excessive compensation on Wall Street?” he writes. “This governor refused to raise taxes on millionaires and has instead slashed the budgets of agencies providing human services, and then has the audacity to announce this probe. He should be ashamed.”
