Ok for Charity Exec's to Make a Shitload of Money?

[Stratego]

Do you think it's okay for the executives of charities to make a shitload of money? By okay, I mean that the marginal benefit of paying such a salary outweighs the marginal cost for the cause of the charity. You can define what amount constitutes as shitload of money (For me, it's $500K/year).

The arguments for allowing charity executives to make a shitload of money is that for the charity to be effective, it needs to attract talented people capable of managing marketing and finances. These talented people wouldn't work for charities if their sacrifice is too great, meaning they'e giving up multi-million dollar jobs for low wages.

The argument against paying them shitload of money is that it takes money away from the cause. If the charity ended up paying a huge portion of the donations in marketing and executive pay, then it's detracts from the cause.

What are your opinions?

[Professor]

I view it as a necessary evil. It's certainly "evil" because every dollar that you pay in salaries takes away from dollars that go towards the purpose of the charity.

But, as you said, it attracts good talent. And, that's what's needed to ensure that the charity's other dollars get spent wisely.

And, is it really that big of a problem?

The American Red Cross had annual revenues of $3.3 billion for FY2013 (http://www.redcross.org/images/MEDIA_Cu ... ments_.pdf). Snopes said that the CEO pay in 2010 was just over $1 million (http://www.snopes.com/politics/business/charities.asp). That's 0.03% of the total. If you decreased the salary by half, only $500k, then you are talking 0.0015%. Overall, not much of an impact.

Or, look at it another way. In 2013, total Red Cross salaries and benefits was $1.5 billion. Her salary is .064%. Reduce the salary by half, and it's only .032%. They have over 35,000 paid employees, with an average salary of $45k.

According to the AFL-CIO, the average CEO of large companies makes 354 times what the average employee makes. In 1980, it was 42 times. The Red Cross CEO makes 22 times what her average (includes herself plus every other employee) employee makes.

Overall, not too bad.

[Philly]

Why don't we pay congress and the president multimillion dollar salaries then. We really need to attract talent there.

[Professor]

[Philly]

[eynon81]

[Professor]

[Philly]

[eynon81]

[eynon81]

also....every CEO is replaceable. No-one is worth a million a year in salary.