Wednesday, February 18, 2009

In Defense of High Salaries for Charity CEOs

A job is a job, right?  Just because people work for nonprofits, doesn't mean they don't want to get the highest salaries they can get.  Professors, doctors, CEO's are naturally self-serving first, charitable second.  That's just how we are wired, I guess.  Anyway, I ran across a rare but sensibly written defense to high salaries in charitable organizations and thought I would pass it along.  Its entitled "Debunking Charity Salary Myths.  Here is a snippett:

High salaries should not signal a red light to not give just as low salaries should not signal a green light to give. Charity salary levels ought to be based on the skill, experience and education necessary to forward the work of the organization. Charities compete with businesses and the government for employees and must therefore offer reasonable wages in order to attract, hire and retain competent people. Many charity employees are willing to sacrifice the higher pay in the private sector for the psychological rewards of working for a good cause. But underpaying employees could sabotage a charity’s programs if the only people willing to accept such low wages are unqualified to do the job. Underpaying lower level employees may be more damaging to an organization than paying top level executives too much. Charities that pay so little that they can’t retain their staff waste a lot of money by repeatedly recruiting and training new crops of employees, and losing valuable institutional knowledge in the process.

I am the first admit that I often fan the fires of indignation when I hear about insiders and disqualified persons making seven figure salaries while doing good.  But I suspect those cases are the outliers and, as such, ought not stereotype the sector.  Still, seven figure salaries -- even for CEO's of REd Cross and other mega-charities just don't seem right.  There are, no doubt, extremely skilled corporate managers who would gladly work for far less and charities ought to work harder to find them.  How's that for "waffling"?

dkj

http://lawprofessors.typepad.com/nonprofit/2009/02/in-defense-of-h.html

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