Local nonprofits always seem to be crying for money. So why do they pay their executives so much?
Earlier this year, Pete Hoskins left his $340,000 job as head of the Philadelphia Zoo and was handed a golden parachute on his way out the door. Zoo officials wouldn't say just how much gold was in that parachute, but count on this: A fund-raising letter from the new Zoo boss will turn up in our mailboxes any day now. It will beg us to become members, and plead with us to open our wallets for all those caged critters out on Girard Avenue. It won't have a word about the Zoo's equally pressing need to pay off Pete Hoskins's big fat parting gift.
That's how it's done in the buddy-buddy world of Philadelphia's big nonprofits. They poor-mouth like mad and rattle the tin cup for donations, but if you dare question what portion of each donor dollar goes to the top dog's paycheck, they fall eerily silent. Nonprofit salaries are public under federal law, but they're buried in tax documents that can be almost a year out of date the day they're filed. No one parts with this information any sooner than absolutely necessary. Stockholders in public companies all know exactly how many of their investment dollars are feathering their executive nests, but nonprofits prefer to play hide-and-seek with their donors over the same information.
This pathological coyness is likely due to the fact that so many of our local nonprofiteers are grossly overpaid. At $340,000 per year, Hoskins was one of the highest-paid zookeepers in America, even though the Philadelphia Zoo is a relatively small and undistinguished outfit that's hardly a must-see among American zoos. The Charity Navigator website also gives the Philadelphia Zoo its lowest rating among peer institutions for what's called “fund-raising efficiency” — basically, the Zoo spends too much money raising money. By comparison, the San Diego Zoo, a truly world-class operation with a four-star rating from Charity Navigator, has a budget more than five times the size of Philadelphia's — and the boss there makes $262,000.
True, the Zoo's fund-raising grew during Hoskins's 13-year tenure, but not nearly at the rate of his salary, which almost tripled from $124,000 in 1997. The Zoo's board of directors, headed by Main Line tubing company magnate Peter Gould, evidently enjoys being charitable with donor money. In 2004, a year in which the Zoo was laying off staff and facing a $4 million shortfall in a $25 million operating budget, its chief operating officer left with a salary and exit package totaling $473,770.
Maybe Gould and his board feel okay showering cash on top management while pink-slipping lower-level personnel because overpaying our underperforming charity executives is a local tradition. Before he left a few months ago, D. James Baker, the head of the Academy of Natural Sciences, was making $284,000 plus $51,000 in benefits to cut staff and improve costs management. His counterparts in San Francisco and Denver make tens of thousands less than Baker did while managing much larger operating budgets with greater success. Bernard Havard at the Walnut Street Theatre made $361,000 in 2004 — more than twice the top salary at the legendary Steppenwolf Theatre in Chicago, and more than half again the top salary at the New York Shakespeare Festival.
And then there's Bill Marrazzo at WHYY, the hands-down local winner of the brass-cojones-bleed-the-donors-dry award. Making $420,000 plus a staggering $86,000 in benefits, Marrazzo is the most highly paid local public television station chief in the nation. He is paid far more than the heads of New York's WNET and Boston's WGBH, who each manage budgets nearly six times the size of WHYY's. Both 'NET and 'GBH are truly great public television stations, with large production staffs and national reputations for excellence. WHYY's significance outside this region begins and ends with Terry Gross.
I don't begrudge anyone's right to make a living. On the other hand, something's grossly askew when the local chief of a very average public broadcasting station with $28 million in annual expenditures pulls down almost as much as the head of the American Red Cross, with its $3 billion budget. Nonprofits are tax-exempt because no one should be getting rich off them, yet Hoskins, Havard and Marrazzo have salaries that put them well within the top one percent of American household incomes. Even in New York, the public broadcasters would be ashamed to go begging on TV with that kind of a bankroll bulging in their pockets. A spokesperson for WNET told the Chronicle of Philanthropy last year that her boss hasn't raised his salary beyond $226,000 for more than a decade because “he believes that since he is very visible in the New York market as a fund-raiser for public television, always on air asking for money, that he should in effect 'put his money where his mouth is.'”
The big problem here is that the concept of “membership” in any of these institutions is a polite fraud. True membership would give ordinary donors a voice and a vote in charity board elections, which might bring executive salaries down to earth. Instead, most nonprofit boards are run like self-perpetuating country clubs, and the cleverest nonprofit chiefs spend inordinate amounts of time recruiting new board members and tending to the vanities of existing ones — the people on whom their paychecks and job security rely. If you can stock your board with enough rich folk for whom $400,000 is chump change, every success is to your credit, and every failure can be blamed on the ignorant indifference of the great unwashed masses. Then — as long as you laugh at their jokes, play a good game of golf, and avoid getting smashed at the gala fund-raiser and puking down the augmented cleavage of some board member's trophy wife — you've got it made.
I like the Zoo. I'm a longtime member, and I'd like to give it extra support. But I don't think it's wise to start contributing to Pete Hoskins's retirement haul when I've hardly set anything aside for my own sunset years. Perhaps someday soon I'll get a fund-raising call from the Zoo. I'll try to be helpful. “I can't give anything right now,” I'll tell them. “But I know someone you should call. He's crazy about animals, and he just came into a whole pile of money. Write down this name: P-E-T-E H-O-S-K-I-N-S.”