Giving money to charity is a wonderful way to help spread some of your good fortune, but as with any investment, it’s important to know where your money is going. There are a number of things that can stand in the way of donations being spent on an organization’s programs (such as administrative expenses, which we highlighted in our roundup of the charities with the highest admin costs and our look at the 20 best charities in the U.S.), and recent attention given to the high salaries, bonuses and retirement packages of some disgraced bank CEOs suggest that the public would like to know about compensation of directors in the charity and nonprofit sector.
Popular charity-tracking site CharityNavigator.org recently produced a report on the compensation of CEOs in the charity world, which it says was motivated by a concern among their users over excessive CEO pay.
As the report states in its introduction, “Many donors assume that charity leaders work for free or minimal pay and are shocked to see that they earn six figure salaries. But these well-meaning donors fail to consider that these CEOs are running multi-million dollar operations that endeavor to change the world.”
The demands of running an organization with a charity’s noble goals is compelling justification for compensation packages intended to attract and retain top talent, but surely some donors might think twice about giving a significant portion of their gifts to an executive.
Here we look at the top 15 CEO salaries in the charity world, excluding degree-granting colleges and universities. Inclusion on this list is by no means an indication of an inefficiently-run organization, but it does highlight how different organizations value the position at the top of the organizational hierarchy.
15th Highest Salary: Stephen Prescott, Okla. Medical Research Foundation
Compensation (2008): $806,150
Having received a four-star (out of four) rating for nine consecutive years by CharityNavigator.org, the Oklahoma Medical Research Foundation is lauded as much for its accomplishments in stem-cell research and diseases like Alzheimer’s and Lupus as for the way it is run. The group has consistently kept administrative costs below 10% to maximize the impact of its benefactors’ contributions.
Stephen Prescott took over leadership of the group in 2007 with a mission to expand the institution, adding researchers and facilities in a project that broke ground this year. The organization recounts Prescott’s feelings at the time: “I thought, ‘Here is a challenge I can sink my teeth into. Here’s a chance to transform an institution.’” It was, he realized, “the kind of opportunity that you might only see once in a lifetime.”
Of course, such transformations do not come cheap, as Prescott’s salary represented a 66% increase over the previous director’s. Few will doubt the value, though, as the organization has seen a significant boost in its revenue in the years since Prescott took over.
14th Highest Salary: Edward J. Benz, Jr, Dana-Farber Cancer Institute
Compensation (2008): $848,802
Boston’s Dana-Farber Cancer Institute is a leader in both the research and clinical sides of the cancer problem, focusing its efforts through The Jimmy Fund, the group’s flagship fundraising arm that organizes charity bike rides, golf tournaments, walk-a-thons and more.
CEO Edward J. Benz, a highly accomplished researcher and current associate editor of the New England Journal of Medicine, works hard to earn his salary of more than $800,000. In addition to leading the Institute, as he has done since 2000, he directs numerous partner organizations like the Dana-Farber/Harvard Cancer Center and Dana-Farber/Children’s Hospital Cancer Care.
13th Highest Salary: Richard Moe, National Trust for Historic Preservation
Compensation (2008): $861,625
The U.S. is a big country and so full of history that it comes as no surprise that there are important historical sites that are in danger of being lost forever. This is where the National Trust for Historic Preservation steps in, a voice for all the smaller sites that may not get official landmark status, which is granted by the Department of the Interior.
A look at the group’s finances shows that in fiscal year 2008, former president Richard Moe received a salary equivalent to 1.46% of the group’s expenses due to a one-time deferred compensation payout. While the raw amount is much higher than salaries of the leaders of similar charities (and a twofold increase over the previous year), Moe’s 16-year tenure as president saw dramatic growth in the trust’s budget.
Of course, some donors have expressed doubts about the value of such a high salary, with comments from two donors on CharityNavigator indicating that the president’s high salary has made them reconsider their donations. The trust, for its part, urges a more comprehensive assessment of its work in its position on charity rating services.
12th Highest Salary: Jonathan W. Simons, Prostate Cancer Foundation
Compensation (2008): $880,801
As any man is well aware, prostate cancer is a problem that affects millions of Americans. According to the American Cancer Society, one in six men will be diagnosed with prostate cancer during his lifetime, and about 32,000 will die of the disease this year. The Prostate Cancer Foundation seeks to reduce these numbers, soliciting donations to fund high-risk, high-reward research in the fight against prostate cancer.
The group has come under fire, at least on CharityNavigator’s comment section, for the involvement of venture capitalist Mike Milken, who established the foundation in 1993. Current President and CEO Jonathan Simons, who joined the foundation in 2007, has a base salary that is twice what CEOs of similar charities receive, and with a $475,000 bonus in 2008, his compensation put him at number 12 on the list.
11th Highest Salary: Deborah Borda, Los Angeles Philharmonic
Compensation (2008): $928,232
Everybody loves music, and while most people express that love by buying concert tickets and CDs, some take their support a step further. Supporters of the Los Angeles Philharmonic donate money to support the organization’s efforts to promote music education and performances in schools, churches and neighborhoods in and around Los Angeles that might not have regular access to classical music concerts.
President Deborah Borda may seem like a fat cat with a salary just shy of a million dollars a year, but it seems appropriate for an organization whose Frank Gehry-designed headquarters is one of the marvels of modern architecture. Indeed, her salary represents only 1.04% of the group’s expenses in fiscal year 2008.
10th Highest Salary: Edwin J. Fuelner, The Heritage Foundation
Compensation (2008): $947,999
The Heritage Foundation, a conservative think tank based in Washington, D.C., describes on its website its mission to “formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.”
President Edwin Fuelner is largely credited with bringing the organization to the highest level of policy organizations in the nation’s capital, transforming the foundation from a small nine-person operation in 1977 to a staff of 255 today. He has been well compensated for his work, too, as his salary of close to $1 million attests. Indeed, the number looks astronomical next to the compensation given to similar charities’ directors as listed on CharityNavigator.
9th Highest Salary: David Mosena, Museum of Science and Industry, Chicago
Compensation (2008): $954,827
Science Museums are cool, and Chicago’s Museum of Science and Industry is no exception. It is the permanent home of the only German U-boat in the U.S., giving visitors an up-close look at the scourge of the American Navy during World War II. Donations to the museum go to support bold exhibits like the U-boat, as well as to the museum’s efforts to promote science education among children.
President and CEO David Mosena has led the museum since 1997, and his compensation in 2008 was as astronomical as the stars in the museum’s planetarium. Even his previous year’s salary, less than half of his compensation in 2008, is more than double what the leaders of other science museums in the U.S. make, according to CharityNavigator’s comparison function.
8th Highest Salary: Reynold Levy, Lincoln Center for the Performing Arts
Compensation (2008): $970,707
Any New Yorker can tell you what an impact Lincoln Center has on the cultural offerings of a city already overflowing with culture. From music to dance to theater, the center’s events spread far and wide across the city. Donors support the center’s operations, as well as education and outreach activities to bring the arts to places without much access to them.
President Reynold Levy, whose $970,707 salary represents only 0.57% of the organization’s expenses, is the only chief executive on this list to have taken a pay cut in 2008, down from more than $1 million in fiscal year 2007. While the number is still higher than comparable salaries in the arts world, at least the director is tightening his belt during tough economic times.
7th Highest Salary: Brian A. Gallagher, United Way Worldwide
Compensation (2008): $982,768
United Way, whose iconic logo and commercials have been icons of the charity world for decades, is a collection of local chapters that support health and education and fight poverty in 45 countries and territories.
President and CEO Brian Gallagher has headed both the American and Worldwide divisions of the charity, with a focus on improving lives rather than just administering donations. He brought in $982,768 in compensation in fiscal year 2008, twice what he received the year previous, but this inflated number includes more than $400,000 of pension income. Looking only at his base salary of $415,970 in 2008 puts Gallagher much more in line with CEOs of similar organizations.
6th Highest Salary: Peter C. Marzio, Museum of Fine Arts, Houston
Compensation (2008): $1,054,939
Houston’s Museum of Fine Arts prides itself on being “the largest art museum in America south of Chicago, west of Washington, D.C., and east of Los Angeles.” Despite the disclaimers, it is a bastion of art in the southern U.S. and it sees more than 2.5 million visits a year, with outreach and education activities reaching more than 670,000 by the museum’s reckoning.
Director Peter C. Marzio is the first million-dollar earner on the list, as the 8.27% increase in compensation from 2007 to 2008 bumped him up to the next level. Director since 1982, Marzio has clearly been rewarded for his longtime service. It may be hard to put a price on art, but not on the director of an art museum.
5th Highest Salary: Michael Kaiser, The John F. Kennedy Center for the Performing Arts
Compensation (2008): $1,091,444
The Kennedy Center in Washington, D.C., is as much a performance space as expression of American culture, with the diversity of its performances reflecting the diversity of this country’s people and places. In its more than 2,000 performances each year, the center promotes all types of music, theater, dance, opera, film, and it hosts a number of awards ceremonies to honor the best this country has to offer.
Donations to the center support the organization’s performances and arts education activities, which have expanded considerably since President Michael Kaiser took over in 2001. After Sept. 11, the arts faced a crisis, but Kaiser’s innovative programs allowed the center to thrive, which also gave him plenty of justification for his million-dollar-plus salary.
4th Highest Salary: Thomas Krens, Solomon R. Guggenheim Foundation
Compensation (2008): $1,716,343
With several years of administrative expenses around 20%, the Solomon R. Guggenheim Foundation known best for the eponymous museum in New York, saw its rating on CharityNavigator drop to two stars in fiscal year 2008.
Perhaps this is due to the departure of controversial director Thomas Krens, who led the museum for almost 20 years and received much criticism for his expensive efforts to create satellite museums around the world. He also presided over a six-fold increase in the museum’s endowment, and was thanked with a severance package in 2008 that made him the fourth highest-compensated CEO in the charity world that year.
3rd Highest Salary: Donald Johnson, Evans Scholars Foundation
Compensation (2008): $2,049,976
Most people can be forgiven for not knowing anything about the Evans Scholars Foundation, created in 1930 to support golf caddies. That’s right, golf caddies. The group’s website explains, “Each year, more than 800 deserving caddies across the country attend college on a four-year scholarship from the Evans Scholars Foundation. Selected applicants must have a strong caddie record, excellent grades, outstanding character and demonstrated financial need.”
Chairman Donald Johnson, who collected $195,000 in salary in 2007, rocketed up to third place with a compensation package of more than $2 million in 2008. Such a jump is surely due to deferred salary or some sort of retirement bonus, as Johnson left the organization at the end of 2009.
2nd Highest Salary: Glenn D. Lowry, The Museum of Modern Art
Compensation (2008): $2,447,882
The home of America’s most significant art holdings (Dali’s The Persistence of Memory, Van Gogh’s Starry Night, Pollock’s One), New York’s Museum of Modern Art is as good as it gets.
Apparently, Director Glenn D. Lowry is also as good as it gets, as he was the highest-paid museum director in the country in 2008, which is also when his previous contract ran out. The MoMA decided to keep him as its director, and his salary of almost $2.5 million reflects the hefty signing bonus that surely sweetened the new deal. After all, his 2007 salary was a paltry $1,264,818 in comparison. No stranger to controversy over his salary, Lowry was taken to task in 2007 for questionable reporting of his salary to the IRS, and for his rent-free apartment paid for by the museum.
Highest CEO Salary: Zarin Mehta, New York Philharmonic
Compensation (2008): $2,649,540
At the top of the list is Zarin Mehta, president of the New York Philharmonic. At first glance, Mehta’s $2.6 million compensation in 2008 looks shocking, but his base salary of less than $1 million will surely reassure donors that 2008's generosity is not a yearly occurrence.
While the bonus can be traced back to deferred compensation since Mehta took leadership of the Philharmonic in 2000, it represented a significant chunk of the organization’s budget that year, at 4% of total expenses. His salary in 2007 was $650,000.
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