December 9, 2017; Janesville Gazette
The headline makes it seem like something is amiss. Nonprofit execs in the Rock County, Wisconsin area receiving higher than average pay? Better watch out! Angst over nonprofit CEO salaries is nothing new, as we all know. NPQ ran a newswire this week about a legislator in Vermont who would like to see a salary cap of $166,000 for nonprofits receiving a certain amount of government funding. However, as the article progresses, it becomes clear that this is really about one person’s salary, which is genuinely higher than the average.
Rock County is in south central Wisconsin. At one time, it was known as the home of Parker Pen company, but that has since closed, as have many other manufacturers. The median family income there is listed as $60,422, or about $5,000 less than the US median. Rock County is also part of the district currently served by Congressman Paul Ryan, who has just celebrated passage of one of the largest tax overhauls in history.
The article in the Janesville Gazette opens by pointing out that the CEO of the local YMCA earns a salary twice as great as any other CEO in the county, and almost three times as much as the average salary for a nonprofit of that size in Wisconsin. The latter statistic is based on a survey conducted by the Wisconsin Nonprofits Association in 2015. The compensation package that Tom Den Boer receives is more than $270,000, or about 10 percent of the agency’s total annual budget.
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Perhaps that statistic is unfair, and the going rate for YMCA CEOs might be more of an apples-to-apples comparison. A quick scan of a few other YMCAs with similarly sized budgets indicates that Den Boer’s salary might be a bit out of line. Stamford, Connecticut, and Sandusky County, Ohio, for example, both have budgets in the $2–$3 million range and do not list any salary above $100,000 on their most recent IRS Form 990 filings. The YMCA in Northwest Florida in Pensacola lists a total compensation package of $188,000.
The board of the Northern Rock County YMCA defended the salary, saying that Den Boer fills the roles of as many as four people within the organization following the Great Recession. In essence, he is both CEO and CFO and thus does more work than any other CEO in the area. As nice as it is to hear a board president supporting their CEO, we are almost certain that other Rock County nonprofit CEOs would beg to disagree with that estimation.
As the article goes on, and as the table presented indicates, it’s really only four of the top 10 earning execs in the area who have higher than average pay. Of those, two have only slightly higher than average pay—they make less than $100,000. Of the top 10 earners on the list, five made more than $100,000. By comparison, the average salary of CEO of a for-profit business in Janesville, the seat of Rock County, is more than $757,000. In the public sector, the highest salary of an employee in the Janesville School District is just over $155,000, and there are about 10 employees in the district earning more than $100,000. When you look at things this way, the numbers for Rock County Wisconsin nonprofit CEOs do not look so bad.
There is something about nonprofit salaries that bothers people. Because nonprofits use government money, tax dollars, or rely on charitable contributions, their executives’ salaries should be regulated, says the legislator in Vermont. Or maybe it’s because people who work in the sector do it for love, not the money, so we can get away with paying them low wages. It may seem that Den Boer and some of the other CEOs are paid a lot. But rather than comparing them to some false average, why not compare them to the work their agencies are doing? Are they having a positive impact? Is the CEO doing a good job leading the agency in that impact? If so, maybe the pay is worth it. As Vu Le once said in a blog on nonprofit salaries, “Dedicated, passionate staff are the most important element of our work…so let’s suck less at paying them more.”—Rob Meiksins