July 1, 2008 | Read Time: 2 minutes
The compensation and retirement package for Gloria Pace King, president of the United Way of Central Carolinas, in Charlotte, N.C., has prompted a debate about whether salaries of nonprofit executives should mirror those of for-profit executives.
Ms. King’s compensation was $1.2-million in the fiscal year ending June 2007 and included more than $822,000 in retirement benefits, reports The Charlotte Observer. The United Way’s board chairman told the newspaper the retirement payments were larger than usual because the organization discovered it had not paid the appropriate amounts since 2000.
Tom Durso, a nonprofit communication consultant, writes on his blog, the 501c3 Files, that some nonprofit workers believe the strength of a group’s mission should “obviate the need to dangle big paychecks to attract talent.” But on the other hand, he says, some people believe that “because nonprofit heads perform essentially the same duties as their for-profit siblings, it’s fine to increase pay packages to lure effective leaders.”
The story has also been the topic of debate on Philanthropy Today, The Chronicle’s daily summary of news about the nonprofit world.
One commentator writes that “With examples like this of outlandish and frivolous use of donor funds, it’s no wonder why some people have lost confidence in the ethical oversight and distribution of philanthropic giving in our culture.”
However, another reader says higher pay is necessary for nonprofit workers, especially in attracting young people to nonprofit work.
“I still believe that the compensation for nonprofits must come much closer to mirroring the private sector, not only for the exec’s but also for the staff,” he writes. “Right now, here in Silicon Valley, there is a push for individuals to major in nonprofit majors. Charities/nonprofits are looking more and more to the young, educated, prime-time in their career, talent. These workers will not venture in the nonprofit arena without compensation somewhat closer to the private sector.”
What do you think? Should nonprofit groups try to pay their executives salaries that are competitive with private businesses in order to attract top talent? Or is this a misuse of donations? Share your thoughts by clicking on the comments link below.
