The $195,000 question: how much is too much when it comes to the salaries of AIDS charity executives?
The unlikely team of a radical San Francisco activist and a conservative Republican congressman has propelled the issue of high executive salaries at AIDS organizations back into the news. But groups that monitor charities say the pair may be asking the wrong questions.
The activist and AIDS patient, Mickael Petrelis, says he discovered about 18 months ago that all tax-exempt charities are required to make public an internal Revenue Service filing, Form 990, that includes the pay of their top five officials. For the past several, months, he and a colleague from the Golden Gate chapter of ACT UP have posted information from the 990s of more than 40 groups on a Web site, www.accountabilityproject.com.
Petrelis also contacted U.S. representative Tom Coburn, a physician from Muskogee, Okla., known for his efforts to establish a national system for reporting the names of people with HIV. On May 6 Coburn took to the House floor to assert that “many AIDS charity executives have put lining their own pockets above saving many lives.”
The heads of the largest AIDS charities are indeed well paid by most people’s standards, with salaries, benefits, and other compensation totaling as much as $195,510, the amount earned last year by Jerome Radwin, chief executive officer of the American Foundation for AIDS Research. That’s 5 1/2 times the 1996 U.S. median household income of $35,492. But such pay levels are actually a bit low by the standards of the charity world, according to figures provided by the American Society of Association Executives, a trade association for the nonprofit sector.
A 1996 survey by the group found that the median compensation, including benefit, for a chief executive officer of a nonprofit professional organization with budget of more than $15 million was $218,404. AmFAR, New York’s Gay Men’s Health Crisis, AIDS Project Los Angeles, the San Francisco AIDS Foundation, and the Whitman-Walker Clinic in Washington, D.C., all have budgets in this size category.
But the median pay package for leaders of those five groups is 1532565, closer to what the association says is normal for executives at groups half their size. Pat Christen, executive director of SFAF, had the second-largest (after Radwin’s) 1996 pay package, totaling $176,742, while Jim Graham, executive director of Whitman-Walker, had the smallest of the five, $143,690.
Dace Stone, president of Whitman-Walker’s board, says comparisons with groups of similar size–Withman-Walker’s budget is $20.5 million–were the main factor in setting Graham’s pay. “We look at leadership attributes and fund-raising capabilities,” she says. “But probably when it comes to an actual dollar figure, we set it according to what’s fair in the marketplace.”
Radwin notes that such jobs do entail sacrifice, both financial and otherwise. “Every single person who is working for a not-for-profit,” he says, “is categorically making less than they would if they were working in the for-profit sector. Everyone I know works extraordinary hours, believes in the cause, and is doing so with some sacrifice to their lives.”
The National Charities Information Bureau, which monitors nonprofits, says that except in extreme cases–like that of William Aramony, the former United Way leader who was paid $463,000 before resigning in disgrace in 1992 and being convicted in 1995 of defrauding the charity–it’s more important to look at a charity’s overall spending patterns than the salary of its chief executive. “We say a bare minimum of 60 cents of every dollar spent should go to program services,” says Dan Langan, spokesman for the bureau. “That leaves you 40% for administration, overhead, and fund-raising.”
Told that activists are raising questions about AIDS salaries, Langan responds, “Well, jeez … they shouldn’t be looking at the salaries, they should be looking at how much money they put into the AIDS rides and how little they get out of it.”
The Pennsylvania attorney general’s office has accused Dan Pallotta, the founder and organizer of AIDS rides across the country, of giving only 19% of the proceeds from a ride there to charity while paying himself $325,000 in 1995. Pallotta, while refusing to discuss his own salary, has said he gives an average of 57% of a ride’s proceeds to charity–still below the Charities bureau’s standard.
Andrew Tobias, a financial writer, notes that higher salaries come with a “multiplier effect.” “If a director needs $110,000 instead of $60,000, that’s not just $50,000 extra,” he says, “because it costs so much money to raise the money in the first place–the development staff, the direct mail, the caterers.” Partly for that reason, Tobias says, he is sympathetic to calls for reduced, pay. “At the risk of offending a lot of terrific people,” he says, “I guess I come down hoping that, wherever possible and within reason, good people can be found to work for relative peanuts–say, twice the median [household] income rather than four or six or eight times as much.”
Still, Tobias says, “GMHC and APLA are huge organizations. And New York and L.A. are expensive places to live. It’s hard,to get upset about these salaries.”
Sean Strub, publisher of Poz magazine, says Petrelis has raised a valuable issue–but it isn’t the salaries, which he calls a “cheap and easy” way to get attention. “The focus on the salaries, which personalizes it to a few individuals, actually distracts from the larger question of accountability to the community,” Strub says. “One component of accountability is cooperative disclosure. Making him jump through hoops to obtain this information disturbs me.”
Petrelis says that while most organizations eventually became cooperative, a few initially had balked at providing the information. GMHC, for example, at first wanted to charge for all but the current year’s documents but finally agreed to provide them all for free.
Many of the AIDS groups say they were less upset by Petrelis’s Web site than by his alliance with Coburn, who has advocated increased funding for AIDS drugs but also an extensive program of HIV testing and names reporting. Petrelis’s work was apparently also picked up at the end of May by the Family Research Council, the antigay group led by Gary Bauer; an E-mail under the group’s signature mentioned Petrelis and Coburn as it charged that AIDS groups spend up to half their money on salaries and little on “direct assistance” to clients.
While AIDS groups do spend a lot of their budgets on salaries, Derek Gordon of the San Francisco AIDS Foundation says most of that money goes to social workers, doctors, and counselors.
“These are salaries for very real lifesaving services,” he says. “They’re using this–they’re leveraging the kind of information that Michael Petrelis is bringing to their doorsteps in a very damaging way. That Petrelis doesn’t realize he’s being used by the right wing to further their agenda just illustrates how out of touch the guy is.”
Petrelis concedes, “I am uncomfortable with the Bauer group’s involvement, but where are the liberals?” He says he went to Coburn after trying unsuccessfully for 18 months to interest two California Democrats, Sen. Barbara Boxer and Rep. Nancy Pelosi, in his cause. Pelosi spokesman George Papagiannis says that to the best of his knowledge, Petrelis hadn’t contacted the congresswoman’s office until June 1, although, because of staff turnover, it’s impossible to say for sure.
Although Coburn says he might seek legislation to limit the amount of federal AIDS funds that can be used on salaries, he has apparently taken no concrete steps to do so. If such an attempt were made, it isn’t likely it would do more than cause minor problems for AIDS groups, says Seth Kilbourn, senior health policy advocate for the Human Rights Campaign. Calls to Coburn’s office seeking comment were not returned.
Still, Kilbourn says, the issue of AIDS salaries has the potential to come up again. I think it’s something the AIDS community will have to be looking at politically,” he says. “How we spend our money, where we spend our money–there are some legitimate questions to ask there, and I think we’ll have to be prepared for that.”
COPYRIGHT 1998 Liberation Publications, Inc.
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