Maine’s Last Nonprofit to Pay a Subminimum Wage Shows a Familiar Profile

Image courtesy of [Public domain or CC BY 4.0], via Wikimedia Commons

July 12, 2017; Bangor Daily News

Today, in another newswire, NPQ offered an update on the fallout from the exposé on Goodwill Omaha, which boasted ever-increasing numbers of highly paid executives in the same organization where more than 100 workers with disabilities were making a subminimum wage. An enterprising local reporter took up the story and called the organization to task, and the effects of that journalistic sunshine are still being felt acutely.

But, the outdated provision in law that allows some workers to be paid less than minimum wage is still in use in pockets around the country. In Maine, a nonprofit called Skills, Inc., pays some of its workers with disabilities as little as $2 to $3 an hour, reports Corlyn Voorhees of the Bangor Daily News, while consistently paying top managers six-figure salaries. It is the last nonprofit in Maine making use of the federal waiver program, and it should have seen the writing on the wall long ago.

Skills, Inc., running on a $13.8 million budget in 2015, is based in the Somerset County town of St. Albans and serves two counties. It runs a combination of residential and employment programs for people with intellectual disabilities, sometimes paying as little as $2.14 per hour. Its largest source of revenue is Medicaid.

As Voorhees points out, “On its tax forms, Skills defines the enterprises where it employs clients, such as the thrift stores and lumber mill, as programs of the nonprofit, which means the organization can funnel any revenue it receives back into its operations.” (Or, perhaps into reasonable pay.)

But the former mill manager, Vernon Martin, received an annual bonus of 25 percent of the sawmill’s earnings between tax years 2009 and 2013 instead of returning that revenue to the organization, according to the nonprofit’s tax forms. In tax year 2013, Skills ran almost $500,000 in the red, while Martin collected his largest paycheck yet.

Former CEO Tom Davis also received a bonus starting in tax year 2009: 10 percent of the earnings of the nonprofit’s thrift stores, kennel and cleaning service. In tax year 2011 Davis started earning an additional bonus of 10 percent of the sawmill’s earnings. Skills sold the sawmill in 2016.

This setup, where top managers receive ever-higher compensation for running programs where employees with disabilities earn less than a minimum wage, bears striking similarity to the case of Goodwill Omaha and certainly provides cause for concern about the general “nonprofitness” of the operation. But the question may become moot, since the organization appears to be paying those bonuses and salaries against consistent deficits, which it ran consistently between 2012 and 2014. In 2014, its deficit was $939,345 and its fund balance had plummeted from more than $4 million to less than $2 million.—Ruth McCambridge