How Much Do Charity CEOs Really Earn?

Viral Postings Claim Charity Chiefs Are Overpaid, But the Facts Are Mixed

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A viral text circulating since October 2005 says that CEOs of charitable organizations are earning hefty paychecks—far more than they should be earning. While some charity CEOs do earn large annual salaries, the information in the emails is inaccurate and outdated. The truth about CEO compensation, according to watchdog groups, is more complicated than it may appear.

Alleged Salaries

Below is part of an email, shared on November 3, 2010, which articulates a familiar complaint about charity CEO pay:

"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 wherever he goes and an expense account that is rumored to be well over $150,000.) Only pennies from the actual donations go to the UNICEF cause (less than $0.14 per dollar of income)."

The email goes on to list several additional "offenders" and warns readers to "think twice" before giving any of their money to another charity.

What Charity CEOs 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 in a report 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” and “Contributions to employee benefit plans" to determine charity CEO salaries.

By that metric, Wayne LaPierre, the chief of the nonprofit National Rifle Association, earned a whopping $4.6 million per year as of December 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 2015.

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 Charity Watch top earners 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 email above. Meanwhile, UNICEF CEO Caryl Stern earned nearly $522,000 in 2016—a high amount, certainly, but less than half of the $1.2 million the above viral posting claimed. 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 much more in the for-profit sector. Furthermore, their skills are valuable in helping to maintain and boost donations, which, after all, are what keep the charities operating. It's up to you, then, as a consumer, to educate yourself as to what the CEOs of your chosen charities are earning, as well as whether you feel they deserve that pay to help keep their organizations operating smoothly.