Cuomo’s Caps on Private Non Profit Executive Salaries Makes $ense!

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Congratulations to Governor Andrew Cuomo for signing an executive order banning any chief executive who runs a private nonprofit agency that receives state funding from earning more than $199,000 per year.  This follows up from last August when Governor Cuomo launched an investigation into the exorbitant salaries paid to chief executives of so-called private nonprofit organizations.  Before shedding any tears for leaders of private nonprofit institutions when they protest potential budget cuts from the City, State or Federal governments, check out their respective organization finances especially salaries to their executive management team.

Too many executives of nonprofit institutions earn a base salary of several hundred thousand dollars.  Some even earn over one million per year! This is supplemented by bonuses, generous health plans, subsidized housing and retirement packages equivalent or greater than the President, Governor, Mayor, any public official, many private sector corporate executives earn or ordinary citizens.

In many cases, these institutions pay excessive funds to public relation firms and lobbyists hired to go after grants from city, state and federal governments.  Others attempt convincing public officials to support earmarking cash for their institutions.

Professional fund raising firms end up taking a greater percentage of donations actually meant for the nonprofit institutions.  (Check with the State Attorney General’s office for their list of registered charities before you respond to any solicitation.)  See what percentage of your contribution actually goes to your favorite charity versus overhead costs for fundraising.   In many cases, the percentage is shocking.

In these lean times executives of nonprofit organizations can set an example for others.  They could take a pay cut and donate some of the excessive compensation or consider giving up some of perks to help their institutions bottom line.

How many newspaper articles have we read concerning corruption in the relationship between elected officials and charities?  Every year, ordinary Americans, business and foundations combine to donate several hundred billion dollars to tens of thousands of charities.  Why do elected officials see the need to use tax revenues to fund their own donations to charities?  These are known as member items and in too many cases have in the past really been pork barrel projects.   Why can’t they make their own personal direct charitable donations to the charities of their choice?  Just how much cash do elected officials personally donate to charities each year out of their own salaries?  Many could dip into excessive surplus campaign funds to make a donation.  They could also host a fundraiser asking some of their regular campaign contributors to support charities.  In addition to financial contributions, millions of Americans also donate time each week to perform volunteer work at their favorite charity.  How many public officials do the same?

Too many members view the funding of member item pork barrel projects as a path to grease the wheels of reelection or run for higher public office.  Like a monkey on their back, they appear to be addicted to this spending.

It is common knowledge about the quid pro quo between those seeking funding and members of the State Legislature and Congress. This sometimes includes campaign contributions from the recipients senior management, hiring of public officials family, relatives or friends along with political clubhouse colleagues by the recipients, invitations to ribbon cutting ceremonies, prominent promotions in recipient newsletters, along with honoring the elected official at the organization’s annual fundraising dinner etc. in exchange for receipt of the funding.

Talk is cheap, but individual voluntary actions such as donating money or time rather than using taxpayer funds to do the same speak volumes.  Private nonprofit organizations should worry more about supporting the causes they care about, rather than lining the pockets of their management team.