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Sadly, the not for profit sector has become a mechanism to avoid paying taxes rather than groups dedicated towards actual charity. That's beyond some of the s

Sadly, the not for profit sector has become a mechanism to avoid paying taxes rather than groups dedicated towards actual charity. That's beyond some of the salaries that directors of these organizations are making.

maxxxxx 10y ago
I once visited a friend who lived in nice neighborhood close to DC. A lot of people there had really nice ($100k+) cars and houses so I asked him where they worked. He told me pretty much all of them work at non-profits. I always thought non-profits are for poor do-gooders. This experience definitely gave me a dose of reality.
th0waway 10y ago
It's a sad truth when a sizeable percentage goes toward employee salaries...
theklub 10y ago
Yeah, the whole has thing become a sham. "Not for profit" except for the CEO making 400k a year, while everyone else gets minimum wage or volunteers and asks for donations to make ends meet.
- lintiness 10y ago
  the same people who gripe about these organizations praise the public and non-profit university / school system --- rife with the same exact compensation abuse.
  - drabiega 10y ago
    Yeah, and we don't like it when it happens there either.
  - GrinningFool 10y ago
    > the same people who gripe about these organizations praise the public and non-profit university / school system They do? All of them or just some? I feel like it's more likely that the same people would have issues with the university abuse too.
- wnevets 10y ago
  If the organization is large enough why shouldn't the CEO make that much? Just because its a non-profit doesn't mean the large organization is any easier to manage.
  - douche 10y ago
    Is the tail wagging the dog, though? Seeing so many charities, with lofty, worthwhile goals (at least as indicated by their names...) that spend upwards of three-quarters of their donations on overhead, administration, and fundraising, makes you wonder.
    - sliverstorm 10y ago
      That's really the key that pisses people off I think, nobody will worry much about high six figure executive compensation if the administration overhead is a tiny portion of revenue. Kidney & Urology Foundation of America is a great example: Total Overhead: 91.9% Management & General Expenses: 38.8% Fundraising Expenses: 53.1% CEO Compensation: $132,642 (31.7% of revenue)
    - dragonwriter 10y ago
      > Seeing so many charities, with lofty, worthwhile goals (at least as indicated by their names...) that spend upwards of three-quarters of their donations on overhead, administration, and fundraising, makes you wonder. While some of those extreme cases may be problematic, I think that there is a risk of putting too much weight on administrative cost ratio (with low ratios being "good") as a metric. Its easy to reduce administrative costs by simply not putting effort into making sure that the way funds are spent is effective at achieving the nominal goals of the organization, but I don't think anyone who thinks things through would think that makes a charity "better". You need better metrics to answer questions of charity quality.
      - throwaway729 10y ago
        Spending time on hiring, code quality analyses (code reviews, performance reviews, etc), refactoring, developer training are all examples of administrative overhead. Software shops that don't invest in any of these things end up producing crap. Software shops that over-invest in these things end up navel gazing instead of getting shit done. The line between reasonable and unreasonable will shift from context to context and from organization to organization. There's no silver bullet or magic metric. Ditto for charities. Running a survey that costs more than your actual charity work in order to determine if some strategy is working might be a complete waste of resources. But it might also make a lot of sense. E.g., before dumping 10x the initial investment into that strategy, or before convincing 5 other large charitable organizations to double down on the new strategy. But sometimes it's the tail wagging the dog and/or a failure of leadership. It's impossible to tell from dollar amounts alone.
exelius 10y ago
I spoke with a CEO of a rather large non-profit hospital system who said, basically, that the only difference between a for-profit company and a non-profit company is that the board of directors of a non-profit have much less oversight to ensure they decisions abide by the charter of the organization. The way the companies operate is exactly the same: try to make as much money as possible to donate it back into the charitable trust. But a lot of it goes to perks and bonuses for executives, along with increased marketing expenses to continue the "donation" growth.
- rayiner 10y ago
  Why should a non-profit pay its employees less than a for-profit company? The labor market is the labor market; the feel-good of working for a non-profit might be a "perk" that justifies a slightly lower salary (like equity in a startup), but it'll only get you so far. Insisting that non-profits pay people less just means they'll get less qualified/motivated people. (And to the extent that the argument is that you don't need to pay $400k to get a qualified/motivated CEO, then that's true of any company--being non-profit has nothing to do with it.)
  - lgleason 10y ago
    Because they are being funded by tax payers.
    - tomjen3 10y ago
      If they pay more than they can get away with, they are wasting money, but if they pay less and get lesser-skilled workers, they are also wasting their money. Underpaying in a non-for profit assumes that they can still get the same quality worker.
    - throwaway729 10y ago
      > Because they are being funded by tax payers Again, this isn't a reasonable argument. The cost of labor does not magically disappear just because the employer is a non-profit instead of a for-profit. Teachers, clerks, and accountants don't magically cost less when they are paid with tax payer dollars. (Incidentally, administrators -- on average -- do cost substantially less in the non-profit sector.)
bsenftner 10y ago
In addition to being a serious developer, I have an MBA. During my studies we were taught that non-profits are just another for-profit vehicle, just with different white washing, and a requirement for lobbyists on the payroll. That entire semester of "Strategy" sickened me.

maxxxxx 10y ago

I once visited a friend who lived in nice neighborhood close to DC. A lot of people there had really nice ($100k+) cars and houses so I asked him where they worked. He told me pretty much all of them work at non-profits. I always thought non-profits are for poor do-gooders. This experience definitely gave me a dose of reality.

th0waway 10y ago

It's a sad truth when a sizeable percentage goes toward employee salaries...

theklub 10y ago

Yeah, the whole has thing become a sham. "Not for profit" except for the CEO making 400k a year, while everyone else gets minimum wage or volunteers and asks for donations to make ends meet.

lintiness 10y ago
the same people who gripe about these organizations praise the public and non-profit university / school system --- rife with the same exact compensation abuse.
- drabiega 10y ago
  Yeah, and we don't like it when it happens there either.
- GrinningFool 10y ago
  > the same people who gripe about these organizations praise the public and non-profit university / school system They do? All of them or just some? I feel like it's more likely that the same people would have issues with the university abuse too.
wnevets 10y ago
If the organization is large enough why shouldn't the CEO make that much? Just because its a non-profit doesn't mean the large organization is any easier to manage.
- douche 10y ago
  Is the tail wagging the dog, though? Seeing so many charities, with lofty, worthwhile goals (at least as indicated by their names...) that spend upwards of three-quarters of their donations on overhead, administration, and fundraising, makes you wonder.
  - sliverstorm 10y ago
    That's really the key that pisses people off I think, nobody will worry much about high six figure executive compensation if the administration overhead is a tiny portion of revenue. Kidney & Urology Foundation of America is a great example: Total Overhead: 91.9% Management & General Expenses: 38.8% Fundraising Expenses: 53.1% CEO Compensation: $132,642 (31.7% of revenue)
  - dragonwriter 10y ago
    > Seeing so many charities, with lofty, worthwhile goals (at least as indicated by their names...) that spend upwards of three-quarters of their donations on overhead, administration, and fundraising, makes you wonder. While some of those extreme cases may be problematic, I think that there is a risk of putting too much weight on administrative cost ratio (with low ratios being "good") as a metric. Its easy to reduce administrative costs by simply not putting effort into making sure that the way funds are spent is effective at achieving the nominal goals of the organization, but I don't think anyone who thinks things through would think that makes a charity "better". You need better metrics to answer questions of charity quality.
    - throwaway729 10y ago
      Spending time on hiring, code quality analyses (code reviews, performance reviews, etc), refactoring, developer training are all examples of administrative overhead. Software shops that don't invest in any of these things end up producing crap. Software shops that over-invest in these things end up navel gazing instead of getting shit done. The line between reasonable and unreasonable will shift from context to context and from organization to organization. There's no silver bullet or magic metric. Ditto for charities. Running a survey that costs more than your actual charity work in order to determine if some strategy is working might be a complete waste of resources. But it might also make a lot of sense. E.g., before dumping 10x the initial investment into that strategy, or before convincing 5 other large charitable organizations to double down on the new strategy. But sometimes it's the tail wagging the dog and/or a failure of leadership. It's impossible to tell from dollar amounts alone.

exelius 10y ago

I spoke with a CEO of a rather large non-profit hospital system who said, basically, that the only difference between a for-profit company and a non-profit company is that the board of directors of a non-profit have much less oversight to ensure they decisions abide by the charter of the organization. The way the companies operate is exactly the same: try to make as much money as possible to donate it back into the charitable trust. But a lot of it goes to perks and bonuses for executives, along with increased marketing expenses to continue the "donation" growth.

rayiner 10y ago
Why should a non-profit pay its employees less than a for-profit company? The labor market is the labor market; the feel-good of working for a non-profit might be a "perk" that justifies a slightly lower salary (like equity in a startup), but it'll only get you so far. Insisting that non-profits pay people less just means they'll get less qualified/motivated people. (And to the extent that the argument is that you don't need to pay $400k to get a qualified/motivated CEO, then that's true of any company--being non-profit has nothing to do with it.)
- lgleason 10y ago
  Because they are being funded by tax payers.
  - tomjen3 10y ago
    If they pay more than they can get away with, they are wasting money, but if they pay less and get lesser-skilled workers, they are also wasting their money. Underpaying in a non-for profit assumes that they can still get the same quality worker.
  - throwaway729 10y ago
    > Because they are being funded by tax payers Again, this isn't a reasonable argument. The cost of labor does not magically disappear just because the employer is a non-profit instead of a for-profit. Teachers, clerks, and accountants don't magically cost less when they are paid with tax payer dollars. (Incidentally, administrators -- on average -- do cost substantially less in the non-profit sector.)

bsenftner 10y ago

In addition to being a serious developer, I have an MBA. During my studies we were taught that non-profits are just another for-profit vehicle, just with different white washing, and a requirement for lobbyists on the payroll. That entire semester of "Strategy" sickened me.