Saturday, January 29, 2011

Salaries of Charity CEO's

Ever given the salaries of CEOs of well known charities a second thought? Well it came as a shocker to me. Here are a few almost random picks from "charity navigator":

Amnesty International: Larry Cox, Executive Director $210,000
American Red Cross: Gail J. McGovern, President, CEO $446,867
Food for the poor: Robin G. Mahfood, President, CEO $345,245
American Cancer Society: John Seffrin, Chief Executive Officer $685,884
:Donald Thomas, Deputy CEO $1,027,306
Children International: James Cook, Chief Executive Officer: $423,114

Do I need to say more? This maddens me. Why would I support these salaries with my gift? How can they ask people with small incomes to give when at the same time there are CEO's leading these organizations with these outrageous salaries. The figures heading these organizations should lead by example. Clearly, they do not invest their time because they care. Very disappointing. Next time they call you for a pledge first ask what their CEO earns.


  1. the question for me is what is the value that these individuals are adding. If they are adding k dollars then k is the upper bound on their salary (this may be a simplification). However without the profit motive to properly dictate salaries how is it to be done. The absence of the profit motive I think leads to inefficient allocation of resources. The question then becomes how do we make non-profit more profit driven.

  2. Unfortunately the alternative seems to be to have incompetent managers running the non-profits. I agree with Anonymous, charities have to focus on cost recovery and that requires private sector bosses.

    Another comparable issue is marketing expenses. How much do you think the pamphlets your favourite charity sends you cost? It might be 40% of the budget. Yet without those expenditures they wouldn't have the other 60% to do work with.

    If you're really interested in this topic -- consider reading/skimming Bill Easterley's book White Man's Burden.

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