Overpaid Charity Bosses Beware: The Internal Revenue Service Is Watching You
Just a few days ago, AccountableCalifornia.org said the IRS "gives each nonprofit's board of directors latitude in deciding how much to pay top managers." Now, reports the Chronicle of Philanthropy, the IRS is "delving deeply into the matter of compensation of highly paid officials." At a national conference of state charity regulators and legal experts, IRS Exempt Organizations chief Lois Lerner expressed skepticism about the "comparability" studies tax-exempt groups use to justify executive pay. "We're going to be looking deeper into the comparables to determine whether they are really comparable, she pledged. She also expressed concern that nonprofits may be pegging salaries to the top of a "comparable" range, placing executive salaries on an escalator. Her talk focused mainly on colleges and universities, but other nonprofits could feel the impact. Full details available at the Chronicle of Philanthropy.
--Steve Askin, Director, the Center for Public Accountability
--Steve Askin, Director, the Center for Public Accountability
Yes on reining in bank CEOs! ... But we at CPA are also concerned that too many frontline caregivers in government-funded clinics subsist on near-poverty wages. Plus budget cuts and rising uninsured rates mean there's not nearly enough money to meet the service demand facing health care charities. Under these conditions, there's no excuse for paying a half million dollars to the head of a government-funded health clinic. - Steve Askin, Director, Center for Public Accountability.
With all due respect, until the Private Sector gets its priorities in order and makes its pay structures commensurate to the success, or lack thereof, of its CEOs, there is little point in penalizing people who are at least *trying* to serve society as a whole instead of the 1.5% of the population who actually own stocks independently outside mutual funds. Government is on the right track limiting the pay of those companies that took bailout money, and the business sector may finally be starting to get an inkling of the outrage at the obscene sums paid for poor performance, all in the name of "paying 'competitive' wages so we don't lose the talent." The $531,000 paid to someone in LA who is trying to help society is a pittance compared to the zillions paid to the head of every major bank in America as millions of people lose their homes. American executives can take some serious lessons from their Japanese colleagues: if you fail, resign, give back the money, and leave. It is the honorable thing to do. Accountability should start with the biggest fish in the pond and work its way down to the smallest. If it does, at least as long as America has its priorities backward, the non-profit sector should be safe from people saying it should be more accountable. Regards, Paul Levinson