September 25, 2012; Source: Aspen Times
We are all used to the news reports of nonprofit executive salaries that are very high and sometimes way out of proportion with the budget size of the organization. This particular article, however, is less common because it looks at some nonprofit executive salaries that have been cut during recessionary times. This is the case for the execs at Jazz Aspen-Snowmass (JAS) and the Aspen Music Festival and School, where the execs remain in place but have taken cuts. In the case of JAS, the organization lost a major sponsor in 2008. They were unable to make up for that gap and also had other losses, running an operating deficit of more than $850,000 in 2010. This required serious cuts to overhead and Jim Horowitz, the president of the organization, took close to a 33 percent pay reduction with his earnings falling from $225,000 to $154,688. He probably also took on additional work since two other highly placed executive staff were let go.
The other example is a bit more questionable as a self-sacrificing role model. Alan Fletcher of the Music Festival had his pay drop by a more modest (approximately) $35,000; that’s in the context of a $430,341 compensation package in 2010. Fletcher has a rocky history with the organization in that in 2009, the executive committee fired him—only to have the full board reinstate him a few weeks later. He is said to have bravely refused to have the $35,000 reinstated to his salary even when the organization restored others in 2011. Of course, that was the same year that the Music Festival reportedly invested a cool quarter million from its endowment fund of more than $50 million in renovating a Mountain Valley residence that Fletcher lives in, so he likely didn’t have to turn the heat down to save pennies. Meanwhile, after Fletcher came on in 2006, grants and contributions to the organization dropped from $9,284,163 in 2007 to $5,224,683 in 2010. That is a drop of more than 40 percent, if anyone is counting, though we realize the recession intervened and grants and contributions can vary widely from year to year in an organization with very well heeled donors.
At JAS, where the director is making $154,000, the budget was $6,480,057 in 2010. Just saying. Both organizations say they did compensation studies on which the salaries were based. Charity Navigator gave JAS two stars against the Music Festival’s three stars.
Meanwhile, in the first installment in this two-part series, the Aspen Times reported on four other execs at Pitkin County-based nonprofits because their compensation packages increased by six figures since the mid-2000s.
NPQ knows that there are plenty of other stories among nonprofits about salaries being adjusted downward during the recession. We’d love to hear about them and what went into making the decision. What was the organizational or other context? Write it in the comments section below or suggest a short piece to be published as one of our “Voices from the Field” columns. –Ruth McCambridge