Nonprofit compensation and expenses: What’s fair? What’s typical?

UNITED STATES - SEPTEMBER 29: Ranking Member Elijah Cummings, D-Md., and Chairman Jason Chaffetz, R-Utah, conduct a House Oversight and Government Reform Committee hearing in  Rayburn Building on whether Planned Parenthood Federation of America, federally funded, September 29, 2015. PPFA President Cecile Richards, testified. (Photo By Tom Williams/CQ Roll Call)

UNITED STATES – SEPTEMBER 29: Ranking Member Elijah Cummings, D-Md., and Chairman Jason Chaffetz, R-Utah, conduct a House Oversight and Government Reform Committee hearing in Rayburn Building on whether Planned Parenthood Federation of America, federally funded, September 29, 2015. PPFA President Cecile Richards, testified. (Photo By Tom Williams/CQ Roll Call)

The House Committee on Oversight and Government Reform’s Sept. 29 hearing on Planned Parenthood’s taxpayer funding – one incident in the GOP’s war on women’s rights – has received extensive media coverage. What I want to talk about today is Committee Chairman Jason Chaffetz’s grilling of Planned Parenthood (PP) President Cecile Richards about her compensation.

According to a Sept. 29 memorandum reporting Republican committee members’ findings in an “investigation” of PP, the organization reported $1.3 billion in revenue for 2014, including $528 million from “government health services, grants, and reimbursements.” According to this memo, “salaries at Planned Parenthood are lucrative.” PP “reports that over 40 of its executives earned salaries of $200,000 or more over the years 2009 to 2013, that PP spent $5.1 million on travel in 2013 and $622,706 “on blowout parties in 20-12 and 2013, and that PP “transfer(s) millions to its lobbying arm each year.” And so on.

Chairman Chaffetz apparently interrogated Planned Parenthood President Cecile Richards about her annual compensation – which she said is $520,000 – implying that there is something problematic about her making so much money. Rep. Elijah Cummings (D-MD), ranking member of the committee (and a member of Congress whom I’ve long admired, I must confess), responded to Chaffetz’s grilling by saying that Ms. Richards’ compensation is in line, that she has done nothing illegal, that the Republican majority in Congress is out to interfere with women’s rights and also has done nothing to rein in corporate financial wrongdoing.

Rep. Cummings mentioned Citicorp, which “pled guilty to manipulating currency markets” and which paid its CEO $13 million last year (Citicorp net revenues in 2014 were $71.1 billion). He also mentioned JP Morgan, which paid its CEO $20 million last year. According to Forbes, JP Morgan reported a net income of nearly $21.8 million on revenues of $91.1 billion in 2014.

As CNN reported in 2014, “In November [2013], JPMorgan paid the Justice Department a record $13 billion to resolve allegations linked to the sale of risky mortgage securities during the housing bubble. That came on the heels of a $4.5 billion settlement with institutional investors who suffered losses on mortgage securities purchased from JP Morgan in the run-up to the financial crisis.”

Rep. Cummings also mentioned Lockheed Martin, which apparently has used taxpayer funds for lobbying. It paid its CEO $33 million last year, he said. Rep. Cummings wondered why Republicans in Congress had not taken action to block any of Lockheed Martin federal contracts. In 2014, Lockheed Martin was the U.S. government’s top contractor, taking in $32.2 billion in federal funding.

But let’s get back to nonprofits.

The Planned Parenthood Federation of America, Inc., is a 501(c)(3) nonprofit organization. Its 2013-14 annual report, most recent audited financial statement, and most recent IRS Form 990 can be found here. (I haven’t checked to see if the numbers in the Chaffetz memo agree with the numbers in the Form 990.)

I have no idea what a reasonable metric is for assessing the fairness of executive compensation is (I’m not an executive, and I’m certainly not compensated like one), so I’m just going to report executive compensation and revenues for a few space-related nonprofits – all 501(c)(3)s, none headed by women – for comparison. I’ve obtained all this information from the organizations’ IRS Form 990s for 2013, unless otherwise indicated – all the 990s are available at guidestar.org.

Challenger Center for Space Science Education:

  • Revenue, $2.6 million (including $1 million in government grants); expenses, $2.7 million; net assets, minus $39,236.
  • “Compensation of current officers, directors, trustees, and key employees,” $429,112; “other salaries and wages,” $908,402.
  • Compensation for president and CEO Lance Bush, $245,400.

U.S. Space Foundation (2014):

  • Revenue, $7 million; expenses, $7.9 million; net assets, $6.4 million.
  • “Compensation of current officers, directors, trustees, and key employees” plus “other salaries and wages,” $3.2 million.
  • Compensation for CEO Eliot Pulham, $275,312; for CFO Holly Roberts, $246,808.
  • Luncheons and banquets, $534,546; exhibits, $376,512; “audiovisual,” $255,073; speakers, $12,202.

X Prize Foundation:

  • Revenue, $22.3 million; expenses, $24 million; net assets, $41.5 million.
  • “Compensation of current officers, directors, trustees, and key employees” plus “other salaries and wages,” $10.1 million.
  • Compensation for CEO Peter Diamandis, $402,390; for president and vice chair Robert Weiss, $492,223.
  • Expenses included $2.5 million for advertising and promotion, $1.2 million for travel, and $2.4 million for “special events.”

I’ve reported on the B612 Foundation’s finances in a previous post.

According to the Congressional Research Service, compensation for a member of Congress is $174,000 (with a few exceptions for leadership positions).

According to the Center for Responsive Politics, Chairman Chaffetz ranked first in the House of Representatives for net worth – his was $788,507 in 2012.

Dear readers, you may make what you will of all of these numbers and claims.

Advertisements

3 Responses to “Nonprofit compensation and expenses: What’s fair? What’s typical?”

  1. thea Says:

    I’m assuming the ‘other’ compensation in these non profit organizations include benefits like 401k and health insurance,bonuses etc. Some of these (c)(3) organizations are cushy. Maybe even a racket. I see organizations here with expenses exceeding revenue. So they drain it down then move on. One might think that non profit organizations exists to create employment for themselves.

    I think planned parenthood should get out of the abortion biz. Its’only’ 3% of their revenues (the rest being donations and gov’t funding. And the shipping fees from baby body parts) But then they wouldn’t be in the victim limelight and people might forget to fearfully donate to them.

  2. doctorlinda Says:

    On the IRS Form 990s, the cost of benefits for employees is reported on a separate line, so it is not included in “compensation.”

    I listened to a webinar on Monday offered by Guidestar, an outfit that monitors nonprofit finances, and learned that the National Football League is a nonprofit organization — outrageous! — and that the NFL pays its CEO Roger Goodell $31 million a year.

    What is wrong with this picture?

  3. mike shupp Says:

    Interesting story at Keith Cowling’s NASAWATCH on compensation paid to officers at CASIS, the 501(c)(3) organization charged with running the science program on the International Space Station. Lots of interesting quotes and figures.

    The TL;DR version: $200,000 per year for an executive’s salary in a small to medium non-profit is pushing the limits of reasonableness. So from the standpoint of what the Red Cross might pay the chief officer in a medium -sized city,
    these space organizations are paying pretty well. Other hand … it ain’t nothing like football.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: