Dani Robbins

Posts Tagged ‘Dan Pallotta’

Executive Salaries and Other Things that Distract Us

In Leadership, Non Profit Boards on April 2, 2014 at 2:41 pm

The Nonprofit Quarterly recently published an article by Rick Cohen that was in support of an article published in the Chronicle of Philanthropy about executive salaries. Both articles focused on a new foundation executive who would not release her salary during the interview. The NPQ article was called “Top Nonprofit Execs: Why not just Disclose Your Salaries?” As I’m sure you’ve gathered from the name, it was not particularly objective.

The article basically railed against Judy Belk, the new exec of the California Wellness Foundation, and other foundation executives who also were unwilling to release their salaries in interviews. As evidenced by the following quote, it said they were not transparent.

“Belk’s decision to withhold the publicly required disclosure of her annual salary isn’t a limitation in transparency. Transparency, as when Belk discussed her desire to reveal what happens in the inner workings of the foundation when nonprofits submit their applications into the foundation’s decision-making black box, means going beyond what is required by law. To reveal what the law requires is simply the law. To tell readers and constituents that they’ll get the information when the legal document—the foundation’s tax filing—is made available is a bit of a slap in the face and not in the spirit of transparency.”

These are two of the media outlets that support our field and, to me, it seems like they are on someone else’s bandwagon. An interview with the media, even a field specific media outlet, is not the appropriate place to disclose salary information. It will be disclosed in the 990, is reflected in the budget and many organizations that strive for transparency may share their board approved salary compensation plans, as appropriate.

Asking a new Foundation leader to publicly disclose her salary during an interview seems out of line and inappropriate, which maybe why so many of them refuse to do it. I do not see it as a violation of a commitment to be transparent; I see it as the honoring of professional boundaries.

I was always taught it was rude to ask someone’s salary and also to be careful of what you disclose to the media. I’m guessing these other execs were taught the same thing.

I don’t believe that salary is the salient point anyway. The salary is set by the Board, not the exec. If you really want to talk about transparency, talk about the process by which that salary was set and how that salary is justified. Talk about the job, and how difficult it is. Talk about the education, experience and capacities of the new leader. Talk about the challenges of running a large organization and also meeting its mission. Talk about how our field is tasked with larger expectations, and lower tolerance for risk. Talk about how the assumption that we should all work for nothing is detrimental to our success. Those conversations are far more important that the actual salary will ever be.

Let’s stop jumping on the idea that nonprofit executives should be held to a higher standard, while getting paid a lower salary, yet still expected to disclose their salary at other people whims because they are running a charitable institution.

I believe in transparency. I believe in providing financial statements, the 990s and the audit, and even the compensation plan for an agency when appropriate. However, I do not believe an interview with the media meets the criteria of appropriate or that execs that refuse to release such information are not being transparent.

You can probably tell that I am a bit sick of hearing about why nonprofit executives should not be paid a reasonable salary for the organizations that they run. Many of us have significant experience, several degrees and lots and lots of time spent trying to improve our leadership, our organization and our community. Why are we always up against this microscope of justifying our salaries, with such little understanding of the role we are playing and how it impacts the organization and the communities we serve?

I’m not always on board with everything Dan Pallotta says but his Ted Talk “The Way We Think About Charity is Dead Wrong” about how we as a society have no problem paying people well who are not helping others but we have a huge problem paying people well who are – is spot on! We have to change the perception that executive leaders in the nonprofit field are do-gooders that don’t also need to pay mortgages and raise their children and shouldn’t be paid an equitable salary for their education and experience.

It is holding us back and every newspaper that jumps on the bandwagon to support that perception is distracting us and our communities from the task at hand.

Have you read the articles? What do you think about execs disclosing their salaries to reporters? What’s your definition of transparency? As always, I welcome your insight, feedback and experience. Please share your ideas or suggestions for blog topics and consider hitting the follow button to enter your email. A rising tide raises all boats.

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Dan Pallotta, Dreams, Overhead and Accounting

In Leadership, Resource Development on March 17, 2013 at 12:44 pm

Have you seen Dan Pallotta’s TED Talk entitled “The Way We Think About Charity is Dead Wrong?” It challenges us to question the way the public thinks about nonprofits and also the way we think of ourselves.

He says the right question is to ask “about a nonprofit’s dreams.”  The wrong question is to ask about a charity’s overhead.  Overhead is not the enemy.

Overhead including part of the CEO’s salary, the fund raising and support staff, the facility, utilities and the equipment in the administrative offices supports the provision of programming. Organizations that have minimal overhead also have minimal capacity. Overhead is a part of growth and challenging a nonprofit’s ability to increase overhead comprises their ability to grow program services.

I also believe that nonprofits, like the rest of the world, get what they pay for. While many nonprofit leaders are exceptional at getting goods and services pro-bono (read: free), it is hard to find excellent leaders to work for free. Some have the financial luxury to be able to do that – and that is wonderful – but most of us don’t.  As such, I love his point about our society not wanting to pay a lot of money for people who are helping other people, but having no problem at all with people making a lot of money not helping people.

The other part of the overhead issue is this:  It’s sometimes an accounting choice.  I used to have a Board member who said “There’s cash and there’s accounting.”  If you have a nonprofit who books their CEO’s salary across the programs (based on a time study that reflects they actually dedicate that amount of time to programming) it will look like appreciably less overhead than the one who doesn’t. Even though the first CEO probably makes more than the second.

If you ask the question about overhead and don’t ask any follow up questions, you won’t get the right information.  And any question that doesn’t get you the information you seek isn’t the right question.

His illustration of someone who really cares about hunger yet chooses against becoming a non-profit leader and ‘takes a huge salary working for a for-profit company and then gives $100,000 to a hunger charity, becomes a celebrated philanthropist and Board member of that charity supervising the person who became the CEO, while still making multiples of that CEO’s salary’ is brilliant!

He goes on to challenge us to “ask about the scale of their dreams; how they measure their progress toward those dreams and the resources they need to make those dreams come true.” Also brilliant!

I once heard someone say to raise a million dollars you need to have million dollar dreams. The guardian angels who will fund your agency in full, no questions asked, are far and few between. As such, some questions for your consideration:

Do you have million dollar dreams?

Does your non-profit have a generous, or even reasonable, compensation package for the staff?

Can you communicate your organization’s impact?

Do you challenge the status quo?

For Board members and community leaders: Are your expectations for non-profit staff different than your expectations for your own staff?

Culture change is hard and so is changing the world.  Let’s start asking the right questions, getting the right answers and allowing our nonprofits to dream.  Let’s fund the dreams that improve our communities!

As always, I welcome your experience and insight.

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