U.S. Charity Chiefs' Pay Averaged $327,575 in 2005

By Laurence Arnold

Sept. 25 (Bloomberg) -- The typical chief executive of a large U.S. charity or foundation earned $327,575 last year, a 3.6 percent increase over 2004, according to an annual survey by the Chronicle of Philanthropy.

While nonprofit compensation has grown faster than inflation in recent years, salaries ``are not going up anywhere near what they are in the private sector,'' said Trent Stamp, executive director of Charity Navigator, a Mahwah, New Jersey-based group that evaluates the performance of nonprofit organizations. ``And for the most part when you see a salary, that's it. There's no perks, no stock, no house that comes with it, no car.''

Rising executive pay is a positive trend at a time when charities and the foundations that support them are under scrutiny by Congress and some state attorneys general, Stamp said.

A public opinion survey in July 2006 by New York University's Robert F. Wagner Graduate School of Public Service found that Americans ``continue to have serious reservations about the performance of charitable organizations,'' a sentiment that took hold during the disputes over how relief funds were distributed after the terror attacks of Sept. 11, 2001.

Subsequent controversies involving the Red Cross, the Nature Conservancy and other large nonprofits fueled the public's mistrust, the NYU study said.

Having It Both Ways

Stamp said that, given those challenges, nonprofits need to raise salaries in order to attract and retain qualified executives.

``As donors, we try to have it both ways,'' Stamp said. ``We try to make our nonprofits operate as businesses, and then we want them to do it for a fraction of what their executives could make in the for-profit sector.''

The Chronicle survey of 332 large charities and foundations showed that top executives of hospitals and medical centers continue to be the best-paid nonprofit leaders.

Topping the list was Harold Varmus, president of Memorial Sloan-Kettering Cancer Center in New York, who made $2.49 million, the Chronicle said. Next came James Mongan, president of Partners Healthcare System in Boston, which operates Massachusetts General Hospital, with $1.52 million. Third was Peter Traber, president of Baylor College of Medicine in Houston, at $1.24 million.

Top Five

For the first time, two nonprofit leaders from arts and culture broke the Chronicle's top five: Michael Kaiser, president of the John F. Kennedy Center for the Performing Arts in Washington, was fourth at $1.03 million. Barry Munitz, former president of the J. Paul Getty Trust in Los Angeles, was fifth at $962,526.

Kaiser received two bonuses in 2005, one of which was earned in 2004, which help account for the jump in compensation from the $773,022 he received in 2004, according to the Chronicle. Munitz resigned in February in the midst of an investigation by the California attorney general of how the Getty Trust spent its money.

Martha Lamkin, president of the Lumina Foundation for Education in Indianapolis, was the top-paid chief executive at a private foundation that participated in the survey, earning $780,326.

The Chronicle explained that its survey doesn't necessarily reveal the top compensation across all nonprofits because executives at some smaller charities and foundations that weren't surveyed might earn large salaries.

College presidents as a group earned the biggest raises, with a median increase of 7.7 percent, according to the Chronicle. The 23 private colleges that participated in the survey paid their presidents $572,750 on average.

Compensation at nonprofit companies pales in comparison to what top corporate executives receive. The median pay of CEOs at Standard & Poor's 500 firms was $5.2 million in 2005, according to a study released in March by the Corporate Library, a Portland, Maine-based researcher.

Posted by Wintermute at September 25, 2006 06:04 PM