THE CHRONICLE OF
PHIL A NTHROPY®
The Newspaper of the Nonprofit World
Volume XXIII, No. 18 • September 22, 2011 • $5
Modest Raises Ahead
Seen for Many CEO’s
as Economy Staggers
By Noelle Barton and Ben Gose
CHARITIES AND FOUNDATIONS are likely to award modest raises to their top executives in 2012 as they keep an eye on the turbulent economy, recruiters and compensation consultants say.
The median increase in pay for leaders of the nation’s largest nonprofit organizations was 2 percent
from 2009 to 2010, according to The Chronicle’s latest
annual survey of executive compensation and benefits.
Executives probably did slightly better this year, and
compensation experts say more of the same may be in
store for 2012.
“Right now, almost everyone is budgeting a 3-per-
cent increase,” says Brian H. Vogel, a principal of
Quatt Associates, a Washington company that advis-
es nonprofit groups and other employers on compen-
sation. “We’re not seeing CEO compensation leaping
ahead like it did before 2008.”
But the recent spate of bad economic signs could
yet derail plans for a modest increase, as nonprofit
groups are only now setting their budgets for 2012,
he says.
Mr. Vogel, who works with large nonprofit organizations, including advocacy groups, cultural institutions,
and colleges, says it would be “prudent” for charities
to take some additional time setting salaries this year
Continued on Page 11
DENNIS DRENNER/AMERICAN RED CROSS
Pay for Gail J. McGovern, of American Red Cross, has remained flat since she took the helm
in 2008, says the charity. She also turned down bonuses in 2009 and 2010, according to the nonprofit.
ALSO
n A look at state efforts to curb nonprofit CEO pay: Page 20
n Online: Detailed data on executive compensation at more than 300 organizations.
As Governments Trim,
More Public Institutions
Fight for Private Gifts
By Holly Hall
NEW T-SHIRTS that declare “Welcome to Brown- backistan” are popping up in Kansas to protest Gov. Sam Brownback’s decision to eliminate all
state aid to nonprofit arts groups.
The governor’s action has set off a struggle for donations, especially because he created a new fund-raising arm, the Kansas Arts Foundation, to seek private
support.
The foundation will seek $1.2-million annually to
replace government subsidies—not just the state aid
but also matching federal funds that were lost when
Kansas eliminated arts from its budget.
The fund-raising competition angers Emily Eakes,
the Lawrence artist who created the T-shirts.
“Arts organizations that were supportive of one another and trying to enhance the arts in Kansas will
now be fighting for the limited amount of private support that is available,” she says.
Such competition is growing more intense around
Continued on Page 7
EMILY EAKES
In Kansas, Gov. Sam Brownback’s decision
to cut state arts aid and seek private
donations inspired this protest T-shirt.
Aid Charities’
Accounting Practices
Draw Criticism
By Caroline Preston
THIS SPRING, the global antipoverty group Feed the Children issued an announcement of the sort any charity would dread making: Its revenue had plummeted by half in a year.
Feed the Children blamed the precipitous drop—
from $1.2-billion in 2009 to $525-million in 2010—not
on the bad economy but on a change in accounting
rules.
The charity said a new rule from the Financial Accounting Standards Board governing how businesses,
nonprofits, and other organizations value goods and
products required it to count medicine and other items
it distributes to poor people not at U.S. prices, as it
had done before, but at the prices they would fetch in
markets abroad.
Virtually all of the decline in Feed the Children’s
revenue was caused by changing the value of a single medicine: deworming pills the charity distributes
overseas to fight a parasite that leaves hundreds of
Continued on Page 33
Scaling Back
n President Obama’s jobs bill includes a proposal to limit charitable deductions for wealthy
Americans, a move nonprofit
groups fear could dampen gifts
in a down economy. Page 36
All in a Day’s Work
n Once a year, a Maryland foun-
dation gives more than a dozen
of its employees the chance to
each pick a deserving charity
to get $10,000 of the
grant maker’s money.
Page 37
