When Should Donors Stop Giving to a Nonprofit Doing Good Work
pic by Daileypic
Nonprofits with high salaries are ruining it for everyone. I have as a personal rule never to give to any nonprofit money if they pay any one individual on their management staff more than $400,000. I also look to see how much in revenues the organization receives each year to see if that number should be smaller. My decision is based on four facts. In 2009 I estimated that the living wage for a family of four is $35,000 plus a year; the average salary for the work force according to the US Department of Labor is $38, 348; no nonprofit should expend more than their 25% of the budget on non service directed functions; and finally no one in the nonprofit community receive a salary more than the President of the United States.
A nonprofit exists to do charitable work. Any employee who must make a salary that represents only 1 percent of the work force is not doing charity work. They are investing in their future on the back of the nonprofit they work for. This takes away precious dollars from the nonprofits mission.
Further, I would advocate that the IRS reconsidered a nonprofits charitable status when salaries have exceeded the norm of nonprofits.
There are three Boston nonprofits that I challenge their boards to reconsider how they compensation their Executives.
• The Boston Symphony Orchestra Managing Director received a salary of $476,100 and benefits worth $78,110.
• The Museum of Fine Arts Director received $591,892 in salary and $128,029 in benefits.
• Suffolk University pays it President over a $1,000,0000 plus benefits.
Nonprofits with extremely high salaries should dig deep and assess what the organization could have used the money on that expands their impact on the community it serves. Now that is a better return.
