This is part of a ongoing series offering Prime readers easy-to-follow tips and tidbits on how to become a better advocate for animals by spending less, saving more, investing better, and giving wisely.
Donor beware! is just as crucial as Buyer beware! As frugal as I am, I was livid when I realized recently that the top executives at two nonprofit civil rights organizations that I support were receiving salaries more in line with the corporate world than the charitable world. The executive director of one had an annual compensation of well over $300,000, and the president of the other received more than $250,000! When I contribute to a nonprofit cause, I want my hard-earned, penny-pinched contributions going to support the organization’s mission—not lining the pockets of its top executive.
Other than all-volunteer groups (like many animal rescues), most nonprofit organizations need to hire staff, administrators, and an executive. And that’s not a problem. The problem is when the compensation—particularly at the top—becomes excessive. It’s an insult to donors and can lead to morale problems among employees and volunteers.
What about PETA? PETA makes this frugal vegan very proud regarding its executive compensation. Just look at its 2009 financial statement (for the fiscal year ending July 31, 2009): PETA’s president, Ingrid E. Newkirk, who has to deal with Washngton, D.C., prices and is herself a regular donor to PETA, earned less than $37,000. Wow!
To put PETA’s president’s compensation into perspective, let’s compare it with the granddaddy of all charitable organizations, United Way Worldwide. For the best “apples to apples” comparison, we’ll use the most recent reported information from the IRS Form 990 (which can be found online at Guide Star). The president and CEO of United Way Worldwide was compensated $982,768 for the fiscal year ending December 31, 2008, or 1.70 percent of the organization’s $57,658,994 in expenses. Compare that to PETA‘s president, who was compensated $35,462 for the fiscal year ending July 31, 2008, or 0.10 percent of PETA’s $32,996,677 in expenses. Put another way, if United Way Worldwide compensated its president at the same rate as PETA, the total compensation would have been $57,659 instead of $982,768—and that’s nearly a million donor dollars that could have (and should have) gone to actually helping others. Moreover, a lot of these execs get free cars, chauffeurs, and other perquisites. PETA’s president doesn’t get any of that.
Excessive executive compensation is not limited to large national and international organizations. It happens frequently even with local and regional organizations, including animal shelters. Consider obtaining this information on your local animal shelter and other organizations that you support. You can ask the organization directly for its latest financial report through a phone call or by visiting its website, or you can search online at Guide Star.
Meanwhile, we can rejoice that no matter how we slice or dice PETA’s president’s compensation (using either actual dollars or a percentage of expenses), Ingrid’s salary is an unbeatable bargain that maximizes donor dollars to be more effective in helping animals. What a friend we—and animals—have in Ingrid!
Celebrate today, plan for the future, and leave a legacy.