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Archive for Tuesday, November 8, 2005

Nonprofit leaders worth salaries

November 8, 2005

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I attend what's commonly called a megachurch. I love my large church even though with more than 7,000 members I often have to worship from an overflow room.

But there is one bothersome downside of attending a megachurch: You're often put in the position of defending your pastor's personal finances.

"What kind of car does your pastor drive?" I was asked recently during a conversation about the growth of large churches.

Before I could answer the question the person went on to say: "Because I don't think it's right for a pastor to be driving around in a big luxury car when his parishioners might be struggling to pay their car note."

I've become accustomed to such comments from people who believe they should prosper, but not a preacher. They criticize the prosperity some ministers of large congregations are personally enjoying, and for that matter the income of many CEOs of charitable organizations.

This compensation issue has become such a concern that the Senate Finance Committee is examining the high salaries of charity executives as part of a wider look at abuses and fraud in the nonprofit sector. The IRS also is looking into the pay and benefits nonprofit executives receive.

Many executives of nonprofits do seem to be paid excessively. And there are some ministers who are living lavish lifestyles that make me wonder whether they are committed to saving souls or saving up for a Bentley.

'Unfounded' criticism

But experts say much of the criticism over compensation is unfounded. Charity Navigator, a leading charity evaluator and donor advocacy group, launched an investigation into the compensation practices at the nation's 4,300 largest charities. The group confirmed that while there are certainly some charities that overpay their leaders, the data show that those organizations are the minority.

The average charity's chief executive officer's compensation is $148,477. This represents 3.4 percent of the average charity's total expenses. Some of these CEOs are underpaid. The report revealed that, along with location, a charity's size and its mission are significant factors that affect a CEO's compensation.

The CEO pay studied by Charity Navigator included salary, cash bonuses and unusually large expense accounts, but not contributions to benefit plans or deferred compensation.

Nonprofit executive salaries aren't outrageous when you consider that many of these are multimillion-dollar operations, not mom-and-pop operations run out of someone's basement, said Sandra Miniutti, director of external relations for Charity Navigator, which I should re-emphasize is an advocacy group for donors.

"For these charities to attract and retain quality leaders, they need to pay them a reasonable salary," Miniutti said. "But I understand donor concerns. It's hard for them to reconcile the large salaries. But we tell donors to look at it in perspective of how the charity is doing. Are they meeting their goals? If you see a high CEO salary and an underperforming charity then, yes it's better to steer clear."

In a look at pastoral pay, including housing, the National Association of Church Business Administration found the average salary to be $91,200. The low side in the survey was $13,700 a year and the high was $249,600. But a pastor's pay plus benefits was directly linked to the size - both budget and attendance - of the congregation.

Taking responsibility

"Ministers should be compensated based on the job responsibility they have," said Phill Martin, director of education for the association, a Texas-based interdenominational Christian organization that provides training to church business administrators. "Some pastors are running multimillion-dollar organizations where they have huge responsibilities and liabilities."

Charity Navigator says that before you criticize the compensation of a pastor or charity's top leader, do some research. At Charity Navigator Web site (www.charitynavigator.org) you can compare a CEO's salary with others in the same category and region of the country.

"Still, some people are uncomfortable with the market-driven salaries of ministers," Martin said. "Many preachers struggle with this whole issue and have a real difficult time talking about stewardship because their compensation comes out of the resources of the church. That's why it's so important to get churches to have controls in place so the minister isn't responsible for setting his or her salary."

But I suspect in many cases, people challenging a pastor's pay or the salary of a nonprofit CEO are really trying to find an excuse not to give or tithe.

Of course many of these same folks will pay mightily to see a football or basketball game. They don't mind subsidizing the lavish lifestyles of obscenely overcompensated athletes but seethe about contributing to the salary for someone who has dedicated his or her life to people's spiritual well being.

I've never looked at what kind of car my pastor drives, nor do I care. When I give I look at whether the charity, church, or pastor is meeting the needs of the people and communities they're serving.

- Michelle Singletary is a columnist for The Washington Post.

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