Salaries of Charity CEOs: Real or Inflated?

Viral postings claim charity chiefs are overpaid, but the facts are mixed

A viral text circulating since October 2005 says that CEOs at charitable organizations are earning hefty paychecks — far more than they should. While some charity CEOs do earn large annual salaries, the information in the emails is inaccurate and outdated. Read on to find out what the viral postings claim as well as the facts about charity CEO salaries.

Sample Email

Below is a sample email posted on the internet on Nov.3, 2010:

Ever wonder where that donation money goes?

Keep these facts in mind when donating. As you open your pockets for yet another natural disaster, keep the following salary facts in mind; we have listed them from the highest (worse paid offender) to the lowest (least paid offender).

The worst offender yet again for the 11th year in a row is the UNICEF CEO; he receives $1,200,000 per year, (plus use of a Rolls Royce for his exclusive use whereever he goes and an expense account that is rumored to be well over $150,000.) Only pennies from the actual donations goes to the UNICEF cause (less than $0.14 per dollar of income).

The second worst offender this year is Marsha J. Evans, President and CEO of the American Red Cross...her salary for the year ending in 2009 was $651,957 plus expenses. She enjoys six weeks of fully paid holidays including all related expenses during the holiday trip for her and her husband and kids. She also receives a 100% fully paid health and dental plan for her and her family, for life. This means out of every dollar they bring in, about $0.39 goes to related charity causes.

The third worst offender again for the 7th time was Brian Gallagher, President of the United Way who receives a $375,000 base salary plus so many expense benefits it's hard to keep track as to what it is all worth, including a fully paid lifetime membership for two golf courses (one in Canada, and one in the US), two luxury vehicles, a yacht club membership, three major company gold credit cards for his personal expenses...and more. This equates to about $0.51 per dollar of income that goes to charity causes.

The fourth worst offender who was also again in the fourth spot, for every year since this information has been made available since 1998 is yet again, World Vision President (Canada) who receives a $300,000 base salary (plus fully furnished a home valued in the $700,000 - $800,000 dollar value range, all housing expenses including taxes, water/sewer, telephone/fax, HD/high speed cable, weekly maid service and pool/yard maintenance, fully paid private schooling for his children, an upscale automobile and a $55,000 personal expense account for clothing/food, with a $125,000 business expense account). And because World Vision is a "religious based" charity, it pays little to no taxes, can receive government assistance and does not have to declare where their money goes. Only about $0.52 of earned income per dollar is available for charity causes.

On the flip side, of the sixty some odd "charities" researched, the lowest paid President/C.E.O/Commissioner was The Salvation Army's Commissioner Todd Bassett who receives a salary of only $13,000 per year (plus housing) for managing the $2 billion dollar organization. That means about $0.93 per dollar earned is goes back out to local charity causes.

No further comment is needed...Think twice before you give to your charity of choice.

What They Really Make

CEOs at some charities and nonprofits do, indeed, earn large salaries, but the email — and many similar postings on the internet — is inaccurate, as noted by a listing of compiled by Charity Watch, a watchdog group that monitors how charities spend money, including what they pay their chief executives.

The group says it used IRS Form 990 categories of “Compensation,” “Contributions to employee benefit plans" to determine charity CEO salaries.

By that metric, Wayne LaPierre, the chief of the nonprofit NRA earned a whopping $4.6 million per year as of Dec. 31, 2015. Next on the list was Jason Klein of Memorial Sloan Kettering Cancer Center, who made more than $3.6 million a year as of the end of 2105. The figures for LaPierre and Klein included quite a bit of deferred compensation for both.

Brian Gallagher, head of United Way International, actually earned much more than the figure mentioned in the email: nearly $1.2 million annually as of the end of 2015, putting him 12th on the list. The Red Cross chief makes $500,000 annually, as of 2016, according to Templeton Blog, about $200,000 less per year than the figure mentioned in the above email, while UNICEF CEO Caryl Stern earned nearly $522,000 in 2016 — certainly high, but less than half of the $1.2 million the above viral posting listed. However, the head of the Salvation Army made more per year than the viral post claimed: $94,000 — and that was in 2003, according to the blog.

Analysis

Is one charity necessarily more respectable than another just because its leader is paid a lower salary?

Not necessarily, according to Charity Navigator. The site's FAQ page explains: 

"While there are certainly some charities that overpay their leaders, Charity Navigator's data shows that those organizations are the minority. Among the charities we've evaluated, the average CEO salary is $150,000...These leaders could inevitably make much more running similarly sized for-profit firms. Furthermore, when making your decision [about where to donate] it is important to consider that it takes a certain level of professionalism to effectively run a charity and charities must offer a competitive salary if they want to attract and retain that level of leadership."

So, some charity CEOs do, indeed, earn big bucks for their services. But, as Charity Navigator notes, they could likely earn more in private enterprise — and their skills may be valuable in helping to maintain and boost donations, which, after all, is what keeps the charities operating.

It's up to you, then, as the consumer, to educate yourself as to what the CEOs of your chosen charities are earning, as well as whether you feel they deserve the hefty pay to help keep their organizations operating smoothly.