The $195,000 Question: How Much Is Too Much When It Comes to the Salaries of AIDS Charity Executives?
Flippen, Alan, The Advocate (The national gay & lesbian newsmagazine)
The unlikely team of a radical San Francisco activist and a conservative Republican congressman has propelled the issue of high executive salaries at AIDS organizations back into the news. But groups that monitor charities say the pair may be asking the wrong questions.
The activist and AIDS patient, Mickael Petrelis, says he discovered about 18 months ago that all tax-exempt charities are required to make public an internal Revenue Service filing, Form 990, that includes the pay of their top five officials. For the past several, months, he and a colleague from the Golden Gate chapter of ACT UP have posted information from the 990s of more than 40 groups on a Web site, www.accountabilityproject.com.
Petrelis also contacted U.S. representative Tom Coburn, a physician from Muskogee, Okla., known for his efforts to establish a national system for reporting the names of people with HIV. On May 6 Coburn took to the House floor to assert that "many AIDS charity executives have put lining their own pockets above saving many lives."
The heads of the largest AIDS charities are indeed well paid by most people's standards, with salaries, benefits, and other compensation totaling as much as $195,510, the amount earned last year by Jerome Radwin, chief executive officer of the American Foundation for AIDS Research. That's 5 1/2 times the 1996 U.S. median household income of $35,492. But such pay levels are actually a bit low by the standards of the charity world, according to figures provided by the American Society of Association Executives, a trade association for the nonprofit sector.
A 1996 survey by the group found that the median compensation, including benefit, for a chief executive officer of a nonprofit professional organization with budget of more than $15 million was $218,404. AmFAR, New York's Gay Men's Health Crisis, AIDS Project Los Angeles, the San Francisco AIDS Foundation, and the Whitman-Walker Clinic in Washington, D.C., all have budgets in this size category.
But the median pay package for leaders of those five groups is 1532565, closer to what the association says is normal for executives at groups half their size. Pat Christen, executive director of SFAF, had the second-largest (after Radwin's) 1996 pay package, totaling $176,742, while Jim Graham, executive director of Whitman-Walker, had the smallest of the five, $143,690.
Dace Stone, president of Whitman-Walker's board, says comparisons with groups of similar size--Withman-Walker's budget is $20.5 million--were the main factor in setting Graham's pay. "We look at leadership attributes and fund-raising capabilities," she says. "But probably when it comes to an actual dollar figure, we set it according to what's fair in the marketplace."
Radwin notes that such jobs do entail sacrifice, both financial and otherwise. "Every single person who is working for a not-for-profit," he says, "is categorically making less than they would if they were working in the for-profit sector. Everyone I know works extraordinary hours, believes in the cause, and is doing so with some sacrifice to their lives."
The National Charities Information Bureau, which monitors nonprofits, says that except in extreme cases--like that of William Aramony, the former United Way leader who was paid $463,000 before resigning in disgrace in 1992 and being convicted in 1995 of defrauding the charity--it's more important to look at a charity's overall spending patterns than the salary of its chief executive. "We say a bare minimum of 60 cents of every dollar spent should go to program services," says Dan Langan, spokesman for the bureau. "That leaves you 40% for administration, overhead, and fund-raising."
Told that activists are raising questions about AIDS salaries, Langan responds, "Well, jeez ... they shouldn't be looking at the salaries, they should be looking at how much money they put into the AIDS rides and how little they get out of it. …