Salaries of Charity CEOs: Real or Inflated?

Salary Data Debunked

A viral text circulating since October 2005 purports to compare the salaries of top executives of U.S. and Canadian charitable organizations.The information is mostly false and outdated. Even a cursory comparison of the two messages below, collected five years apart, reveals that much of the information contained in the 2010 version was repeated verbatim from the text originally distributed in 2005 — yet the 2005 version wasn't accurate in first place!

2005 Salary Data for Charity CEOs

As of 2005, these were the most up-to-date and trustworthy salary figures for the executives originally listed:

  • Marsha J. Evans, President and CEO of the American Red Cross, was paid $468,599 in salary and benefits in fiscal 2003. (Source: BBB Wise Giving Alliance)
  • Brian Gallagher, President and CEO of United Way, was paid $432,709 in salary and benefits in fiscal 2003. (Source: Charity Navigator)
  • W. Todd Bassett, National Commander of the Salvation Army, was paid (along with his wife, who also works for the organization) an estimated $94,091 in salary and benefits in 2003 (including house and car). (Source: Fayetteville Observer)

2010 Salary Data for Charity CEOs

  • As of 2010, Marsha J. Evans, was no longer employed by the American Red Cross. According to United Press International, Gail McGovern took over as CEO of the American Red Cross in 2008 at an annual salary of $500,000 plus a signing bonus of $65,000.
  • Brian Gallagher is still President and CEO of United Way, and currently earns $1,037,140 per year, according to a December 2010 report from the American Institute of Philanthropy.
  • W. Todd Bassett is no longer National Commander of the Salvation Army. The current National Commander, Israel L. Gaither, is paid somewhere between $79,389 and $243,248 annually for his services. (Since the Salvation Army, as a religious organization, doesn't report its expenses to the IRS, the only available figures for executive salaries are estimates, which vary greatly depending on the source.)
  • UNICEF's Executive Director, Anthony Lake, earns $201,351 a year, according to a 2010 communique from the organization — dramatically less than the $1,200,000 per year claimed in the message above.
  • Dave Toycen, the President of World Vision Canada, earns $184,000 per year plus a "moderate vehicle allowance," according to that organization's annual report to the Canada Revenue Agency. Again, that is significantly less than what is claimed below.

Tips for evaluating charities

Is one charity necessarily more respectable than another just because its leader is paid a lower salary? Not necessarily, according to Charity Navigator, a website that evaluates and compares the financial health of charitable organizations.

"While there are certainly some charities that overpay their leaders," the site's FAQ page explains, "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."

Sample 2010 Email About Charity CEOs' Salaries

Here's a sample email text posted online on November 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 Royal Royce for his exclusive use where ever 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.

Sample 2005 Email About Charity CEOs' Salaries

Here's email text contributed by Galaine on Oct. 26, 2005:

As you open your pockets for yet another natural disaster, keep these facts in mind:

Marsha J. Evans, President and CEO of the American Red Cross receives a salary for year ending 06/30/03 of $651,957 plus expenses.

Brian Gallagher, President of the United Way, receives a $375,000 base salary plus numerous expense benefits.

The Salvation Army's Commissioner Todd Bassett receives a salary of only $13,000 per year (plus housing) for managing this $2 billion dollar organization.

No further comment necessary.

Sources and further reading:

Red Cross Names New Chief, Gail McGovern
UPI, April 9, 2008

Salvation Army: Executive Compensation Data
Chronicle of Philanthropy, 2010

Salvation Army, November 24, 2009

America's Biggest Charities
Forbes, November 17, 2010

Top 25 Compensation Packages from AIP's Charity Rating Guide
American Institute of Philanthropy

UNICEF Canada Addresses Misleading Emails
UNICEF Canada, 2010

World Vision Canada: Our Approach to Executive Compensation
World Vision Canada

Charity Navigator - Fundraising Organizations
Evaluates financial health of charitable organizations

Top Rated Charities
American Institute of Philanthropy

America's Most (and Least) Efficient Charities, November 24, 2004

Charities' Leaders Take Home Big Checks
Fayetteville Observer, April 4, 2004

Major Charity Heads Reap Rising Pay
CBS Market Watch, December 5, 2003

Charity CEO Compensation Study
Charity Navigator, August 8, 2005