Nonprofit Good Ole Boys and How they Hurt Us

March 23, 2011; Source: Boston Herald | “The not-for-profit world has done such a good job convincing the public that they do God’s work, but they do not all do God’s work . . . They’re all sitting on each other’s boards and back-slapping at the Symphony, and in the end it’s the ratepayer and the taxpayer that’s losing.”

So says Massachusetts state senator Mark Montigny of recent scandals about nonprofit executive and director compensation. The most recent occasion of his outrage is the revelation of salaries and trustee compensation at Independent Systems Operator New England. This organization oversees the region’s electric grid and it also pays some pretty lavish salaries starting with (but certainly not limited to) $1.4 million to the president, Gordon Van Welie.

Trustee payments have also come under scrutiny as it has come to light that a player in yet another scandal, Dr. Paul Levy, is an ISO trustee. Levy recently parted company –fairly publicly – with a large hospital system that he headed in Boston after long-simmering charges of an improper relationship with a subordinate came to a head. Levy now makes $91,000 a year, for an estimated six hours a week of work on the board of the ISO.

Montigny, meanwhile has filed a bill that would cap nonprofit executive salaries at $500,000 and that would completely outlaw compensation for trustees unless the organization was given special permission by the state. I know that this opinion will strike many as unenlightened but this bill doesn’t bother us. The bill will affect very few of us and is over all in line with our own opinions about compensation. So it isn’t the legislation that bothers us, but the public perception that may act as the fuel to turn it to law very definitely does.  

This Massachusetts story comes right on the heels of a scandal about an $11 million severance payment to a departing Blue Cross executive right as everyone’s insurance premiums have made another climb. It is not a good look for us as a sector. – Ruth McCambridge