October 3, 2012
I feel like everyone is looking at this from the wrong perspective. 1st) The approach to CEO pay for a large non-profit CANNOT be approached much differently from CEO pay for a large corporation. Why? While there are surely a multitude of positions within a charitable organization that can pay based on the size of an employee's heart to a greater extent than for the size of an employee's skill, the CEO is not one of them. There are two basic reasons. Firstly, an organization of Samaritan Purse's magnitude and undoubted organizational complexity (non-profit, NGO, corporation, or otherwise) MUST attract an individual who is an excellent steward of the organization's assets. This means finding someone with a ton of a talent, decades of experience, and a rare skill set that involves managing - in this case - millions and millions of dollars in revenue and assets. That doesn't come cheap. In order to compete with high-paying firms that need great CEOs to do the exact same thing, non-profits have no choice but to compete on pay. Additionally, after some of the issues with big non-profits like Goodwill, it is imperative that a CEO be incentivized to uphold the core values of the organization and to, again, be an excellent steward of its assets. Because stock options are not an "option," in the case of a non-profit, salary is the only option. 2nd) What we should really be asking is why a non-profit is retaining 10% of revenue (primarily from donations) instead of spending it on programs; that's over $37 million in this case, folks. That's $37 million that's just sitting around not helping people who could use it. There are a few reasons (beyond idiotic management) that could explain this, but maybe it would better to look into something meaningful like that, instead of worrying about a CEO who is paid at a considerably lower % of expenses that a whole host of CEOs at other non-profits. For example, is this excess the result of forward planning in lieu of the potential Euro-zone meltdown, or the general volatility of the market over the last couple of years (which could ultimately result in a steep decline in donation funds in the matter of, say, only a few months... if that)? Maybe, within the regions in which Samaritan's Purse operates, it has simply exhausted its volunteer base, and has no ability to increase its operations to a point of alignment with the company's current donation potential. If the latter is the case, then they definitely don't need that extra 10% every year, and you might consider being cautious when making the decision to give. 3rd) There was an individual who gave the organization a 5 out of 5, apparently based solely on having participated in downstream, donation-acquisition activities. I would caution that it is the organization's macro financing and ultimately a thorough appraisal of its efforts abroad and/or in the inner cities (depending on the organization) that have a considerably more valuable bearing on its success in terms of making a difference for those who need the assistance.
Will you volunteer or donate to this organization?
How much of an impact do you think this organization has?
When was your last experience with this nonprofit?
MY ROLE:General Member of the Public