June 15, 2006 | Read Time: 3 minutes
The breaking point for me came when I opened my New York Times to learn that Lee Raymond was paid $144,573 a day, each and every day that he served as chief executive officer of the Exxon Mobil Corporation from 1993 to 2005. In other words, he made around three times as much money by the end of the first Monday of the first workweek of January than an average schoolteacher would make that entire year.
A few hours later, I opened some mail and found that a college classmate of mine was now the CEO of the Chicago Public Schools. It used to be that people who ran school districts were called superintendents and people who ran nonprofit organizations were executive directors, but more and more are adopting the title CEO because they feel it somehow gives them more stature or credibility because it is more “corporate.”
Thinking about what I had just learned about Lee Raymond, I had to wonder why it is that nonprofit officials have taken to appropriating the titles of people like him.
When nonprofit groups use the same titles as executives of corporations, it confuses the public about the essential difference between the two types of groups. Both organizations provide goods and services. But for-profit companies want the public to buy their goods and services for the purpose of creating wealth for private individuals. Nonprofit groups seek support from the public to deliver goods and services that are of benefit to the public itself and society at large, not private individuals.
We do something profoundly different than what they do and should maintain our special profile, not blur the lines by using similar titles for our top leadership.
What’s more, in this era of runaway executive compensation in the business world, using a different title from business chiefs helps demonstrate that nonprofit officials do not pursue their careers with the goal of enriching themselves. The average corporate CEO makes an astounding 104 times more than an ordinary worker in his or her company, according to the same Times article that included Mr. Raymond’s pay.
Executives make a lot more than front-line workers at nonprofit groups, too, but at organizations like mine, the multiple is in the low, low single digits. It’s not 104.
Donors and the rest of the public need to understand that nonprofit leaders have chosen career paths motivated primarily by service, not avarice. Our titles should reflect that difference.
As someone who holds an M.B.A., I am always a bit amused when people tell me that nonprofit groups should be “more like corporations,” as if corporations have some higher knowledge that we village idiots in the nonprofit world lack.
I instead agree with Jim Collins, the business expert, who wrote in Good to Great and the Social Sectors, “We must reject the idea — well-intentioned but dead wrong — that the primary path to greatness in the social sectors is to become ‘more like a business.’ Most businesses — like most of anything else in life — fall somewhere between mediocre and good.” He added: “Many widely practiced business norms turn out to correlate with mediocrity, not greatness. So why then would we want to import the practices of mediocrity into the social sectors?”
What seems to have been forgotten in the nonprofit world’s slavish aping of the corporate model is that some corporations are effective and others are not, and some CEO’s are good, while others are not. We certainly can learn from for-profit organizations and their leaders, but they don’t have some magic that we lack. Trying to be more like business executives (and copying their titles) isn’t going to necessarily make us any more effective as organizations or leaders. Nonprofit leaders should be proud of who we are and of how we are not the same as for-profit leaders. Let’s stop calling ourselves something we’re not.
Kevin Jennings is founder and executive director of GLSEN, the Gay, Lesbian and Straight Education Network, in New York.
