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According to the US census bureau, 45% of all households in the US earn about $50,000 dollars for the year. The president of the United States makes $400,000 dollars a year. If a company were to say that their CEO will only make a salary equal to $400,000, the chances are that the candidate pool will expand substantially. Rather than hiring someone who may be the best qualified person for the job, but also demands a salary triple the size of $400,000.

For a non-profit organization to be willing to pay someone anymore than $400,000 dollars is simply ruining their chances of accomplishing their goals. For one, you hired someone who clearly isn’t as interested as the rest of the employees in accomplishing your organizations goals as opposed to raking in as much cash as possible. Too much money for one person means less income to achieve your organization’s mission.

It’s clear that the president of the United States has the hardest, most time consuming job in America. He is on call twenty four hours a day for four years until election time comes around where he’ll work even harder to get the same position for another four years. If he can live with a $400,000 dollar salary, any candidate for a president position either for non profits or for profits should be quite comfortable with such a lucrative salary.

Clearly many if not all of the fortune 500 companies did not get the memo about how reasonable a $400,000 dollar salary for their CEO’s is. According to the associated press, Goldman Sachs Group Inc.’s CEO, Lloyd Blankfein earned $42.9 million. Consider that only 2% of the households in the US earned $250,000 dollars or more in 2007. Is it really necessary for anybody in any kind of position to ask for more than $400,000 dollars a year for putting in hardly the same amount of work and strain the President puts on himself? I think not.

Boards of Nonprofit’s practicing the approval of these unreasonable salaries need to stop fooling their donors and focus on their mission and stop paying large salaries.   Any organization that wants to pay these high unreasonable salaries should become a for profit company.

Another alternative is the Board votes to lay off the high price individual and keep the workers actually delivering the mission of the organization. 

Amid the 2008 financial melt down organizations and individuals have been further adversely effected with the traditional financial institutions. The yield on savings, money-market accounts, and certificate of deposits are dropping dramatically.

There are basically only two types of entities who are giving a better return;  Credit Unions and Small Banks.  It just goes to show you that local banking just might be a better way to bank and an avenue to building sound financial relationships.

The change in accounting standards will cause two surprises for nonprofits.

Audit costs are likely to increase up to 20%.

Your audit will cite internal controls and other processes in your organization which it had previously ignored in prior years.

To control your audit costs, be better prepared to provide your auditor the financial material in an organized manner. Your organization will be billed for each minute. Your mess is billable for them and they are not required to tell you how to decrease your costs.

Second, make sure more employees are trained on your internal control processes. The more you can document the checks and balances the better for management and the board to show their fiduciary responsibility.

Nonprofits service millions of people each day.  The government gives a break on fuel costs to millions of individuals each day but not to nonprofits.

While non profits are exempt from paying property taxes and income taxes, they are required to pay gasoline taxes and fuel taxes and to reimburse employees for transportation costs. 

So I challenge the nonprofit community to show the government how much it contributes annually in fuel and transportation related taxes.

As the largest employer sector in the country, you make a big difference and get little credit.

Stand up and be counted.  Being part of an Association is one way to be that voice.