Questioning how non-profits spend
To the Editor:
Because of the economic downturn, more people are not only turning to non-profits for help, but are questioning how their contributions are budgeted. Are donations going to help those in need or to excessive executive pay?
In New York, Governor Andrew Cuomo has issued an executive order barring payments for salaries in excess of $199,000 to for-profit and non-profit organizations receiving state funds.
In New Jersey, Governor Chris Christie capped the salaries of top-earning executives to $141,000 for any non-profit social service agency with a budget over $20 million.
The Federal Internal Revenue Service has added a new requirement for non-profits to disclose on their annual tax forms how their boards of directors determine compensation for key employees. Non-profits must be able to show that they make these decisions using compensation data for comparable positions in comparable organizations. A recent study on non-profit salaries indicated that the median total compensation for all chief executives is $60,000. Salaries are generally proportional to the nonprofit’s budget size, with chief executives of smaller organizations receiving the lowest pay. For non-profits with budgets below $300,000, the median compensation for chief executives is $40,453. For those with budgets from $300,000-$499,999, it is $50,000. For budgets from $500,000-$999,999, it is $57,518. For budgets from $1 million to 2 million, the median increases to $73,730.
Please ask questions regarding how your donation to a Morgan County non-profit is allocated today, as the cause that you support and others rely on may not be there tomorrow.
Printed in the April 19, 2012 edition.