October 2, 2008 | Read Time: 5 minutes
The Chronicle’s 16th annual salary survey provides compensation information for top officials at 291 charities and foundations in the United States.
Many organizations included in the report were among the organizations on last year’s Philanthropy 400, The Chronicle’s annual list of charities that raise the most money in private donations, or are among the nation’s wealthiest foundations.
For categories of groups not well represented on the Philanthropy 400, The Chronicle gathered information from organizations that raised nearly enough money to appear on that list. Foundations were included based on The Chronicle’s annual survey of grant makers and the Columbus Foundation’s survey of community foundations that raised the most money in 2006. Information from the Foundation Center, in New York, helped to determine the wealthiest operating foundations.
The survey results include information from 20 private foundations, 14 community foundations, and 12 operating foundations, the wealthiest in each category.
Results also include eight watchdog groups that focus on charities and foundations, and 17 trade groups and philanthropy-research organizations.
Two trade groups, the Association of Fundraising Professionals, in Arlington, Va., and the Association for Healthcare Philanthropy, in Falls Church, Va., are included in this set, although they are registered under a different section of the Internal Revenue Service tax code than are charities or grant makers.
These groups are classified by the IRS as trade associations, and thus, when calculating compensation, might be more likely to compare themselves to groups that represent businesses rather than apply the standards of charities and foundations.
The Chronicle asked each nonprofit group to complete a questionnaire and provide supporting information from its most recent Form 990, the informational tax return charities are required to file with the Internal Revenue Service, or Form 990-PF, the equivalent return for grant makers. The newspaper also collected audited financial statements and annual reports for the 2007 fiscal year, or the most recent year for which data were available.
The Form 990 and Form 990-PF both include broad information about compensation, benefits, and expenses provided to an organization’s officers and five highest-paid employees. The Chronicle’s survey questionnaire asked for more detail, such as the amount awarded in bonuses, housing allowances, health insurance, retirement, and other payments.
Top Two Officials
The Chronicle’s survey gathered information on an organization’s top official, such as the chief executive, president, or executive director, as well as the most highly paid employee other than the top executive. Employees whose compensation was inflated due to a one-time payment, such as severance or a pension payout, were excluded from the mix.
Sixty-nine groups had the IRS’s permission to file their most recent tax returns late, and 39 of those provided the most current compensation data. Forty-three groups said the most current information they could provide was for the 2006 fiscal year.
Twelve religious organizations provided financial data, though such groups are not required by law to publicly disclose that information.
Three religious organizations that The Chronicle sought data from — the Catholic Foreign Mission Society of America (Maryknoll Fathers and Brothers), in Maryknoll, N.Y.; Mission to the World, in Lawrenceville, Ga.; and National Catholic Development Conference, in Hempstead, N.Y. — declined to provide information. or did not respond to requests
Campus Crusade for Christ, in Orlando, Fla., provided data on its president’s compensation, but declined to provide information on the pay of other employees, saying the group has several vice presidents who are in the same salary range.
Because the Chronicle survey examines executive pay at the biggest or wealthiest charities and foundations, it may not include all of the top earners in the nonprofit world. Some of the best-paid people may work for small charities and foundations or organizations that receive the bulk of their finances from government.
In comparing compensation at organizations, it is important to keep in mind IRS rules for reporting such information. For example,a charity is allowed to report accrued deferred compensation in one lump sum several years after it has accrued, making an executive’s compensation or benefits figure look unusually high.
Special Cases
Other one-time circumstances, such as relocation costs or a bonus based on that year’s performance, may also result in the appearance of a significant change in a person’s compensation or benefits.
Several organizations provided information in ways that differed from methods used by other groups in the survey.
One organization provided data solely for one executive: American Institute of Philanthropy, in Chicago, declined to provide information on the highest-paid employee other than its chief executive, Daniel Borochoff. It noted that it is not required to disclose that information on the Form 990 because that employee’s pay did not reach the $50,000 threshold set by the IRS.
Another organization, the Salvation Army, in Alexandria, Va., makes a distinction between compensation and allowance pay, and refers to the pay given to all employees as an “allowance.”
The goal, the organization says, is to show that salaries are set to accommodate an employee’s basic needs, rather than compensate them for their work. Unlike traditional compensation, the organization’s “allowance” pay does not differentiate between different levels of responsibility among employees. The organization also declined to name its highest-paid employee other than the chief executive, and is not required to file a Form 990 because it is a religious organization; therefore the name of that employee is not public. However, it did note that the highest-paid worker was its director of financial operations for Greater New York.
Some organizations whose 2007 IRS tax forms were not yet complete responded with estimates for the 2007 fiscal year.
The Chronicle’s survey asked groups to provide an annualized compensation figure for executives who started their jobs after the beginning of the 2007 fiscal year, and all but six of the 16 organizations that had chief executives who worked partial years provided that information.
The Chronicle’s salary survey was compiled by Noelle Barton, Maria Di Mento, and Candie Jones, with assistance from Analissa Dimen Kiss.
