September 29, 2009 | Read Time: 1 minute
A debate has erupted over whether the almost $1-million compensation for the chief executive of the Bill & Melinda Gates Foundation is justified.
A new Chronicle survey shows that Jeffrey S. Raikes, who joined the Seattle fund last year, is earning a $990,000 annual salary, the largest compensation for the 49 foundation leaders included in the study.
The authors of Philanthrocapitalism, Matthew Bishop and Michael Green, argue on their blog that Mr. Raikes’s pay may cause some “huffing and puffing” but that it is well deserved. The nonprofit world should be able to reward talented leaders, they argue.
“The tendency to judge nonprofit management by the scratchiness of their hair shirts (on the basis that paying decent salaries is a ‘waste’ of precious charitable donations that should be going to the beneficiaries) is widespread,” they write. “Yet this is a dangerous canard.”
But Felix Salmon, a blog writer for the Reuters, isn’t buying it.
“Is there any indication at all that increasing the pay of nonprofit leaders increases their performance? I doubt it,” he says.
Mr. Salmon also disagrees with the foundation’s reasoning behind its decision to pay Mr. Raikes.
The foundation did not pay its previous leader, Patricia Q. Stonesifer, who earned a personal fortune as a Microsoft employee. But with Mr. Raikes, who also is a multimillionaire thanks to his 27 years with the software giant, the foundation did not want to set the precedent of not paying its top executive.
Mr. Bishop and Mr. Green say this was a wise move. “It would be a mistake to make a career in philanthropy the exclusive preserve of those with private means,” they write.
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