January 22, 2013; Source: Times-Tribune
From Pennsylvania, where the fight over nonprofit payments in lieu of taxes (PILOTs) has been waged furiously over the past few years, this Times-Tribune editorial takes on the compensation of one Nicholas E. Colangelo, the former CEO of Clearbrook Inc., a nonprofit substance abuse treatment organization. Between 2008 and 2011, Colangelo’s compensation reportedly totaled $2.5 million. What stood out for the Times-Tribune editors was the fact that Colangelo told a reporter that he was as focused on his mission as Gandhi and Mother Teresa were focused on their missions. He was apparently using this as justification for his compensation level, which the Times-Tribune rightfully finds a bit “odd.”
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This leads the Times-Tribune to suggest that not all nonprofits are deserving of the public’s general impression of them as doing good work on a dime. The Times-Tribune writes:
“To the degree it can, the state government should ponder the significance of having nonprofit organizations that can’t afford to pay taxes but can afford to pay administrators high six-figure and low seven-figure salaries, often at least partially with revenue from government contracts. In cases where an agency performs a service that the government otherwise would have to perform itself, the state should limit compensation for executives to levels similar to comparable government executives.”
NPQ published a newswire last week on a ballot initiative that imposed a limit on executive pay at a California hospital. The cap requires that hospital execs not be paid at a rate of more than twice the salary of the state’s governor. This editorial is yet another indication that, in the court of public opinion, high nonprofit salaries do not necessarily play well. –Ruth McCambridge