Last week, the NY Times had a story about how lawmakers are really scrutinizing the salaries of non-profit leaders. The paper notes that New Jersey recently passed a provision that “includes a limit on what nonprofit groups can pay their chief executives if they are providing social services under state contracts. The cap, based on a formula that also applies to for-profits providing such services on behalf of the state, is part of a broader effort by Gov. Chris Christie to rein in salaries on state workers.”
It seems to me that it may not be a very long jump to apply the same scrutiny to arts organizations who receive government funding. It may not be in the next few years, but it could be coming. It wouldn’t surprise me if NJ was the first to do it too given their “cut off your nose to spite your face” attempts to reduce arts funding a year and a half ago.
My initial impulse was to write something about how the government was coming after the non-profits because they couldn’t rein in the salaries at big corporations which made big campaign contributions. I also wanted to moan about how money equals access and the need for more visible and active advocacy if the arts didn’t want to be victimized by such unwarranted scrutiny. Charity Navigator is cited as saying only 2/10th of 1% of non-profits in the U.S. actually pay their leaders six figure salaries. But you get one story about Joe Dowling making $680,000 at the Guthrie Theatre and suddenly everyone else is eyed suspiciously despite their 10 year old car that has clearly needed a new muffler for the last 6 months.
And you know, I may still follow that impulse and further rant. But I want to ask. If the NJ state government is so concerned about efficiency and effectiveness in their contracts with social service agencies, are they also going to look at whether people are being paid too little? There is likely much more waste in employee turn over due to retraining costs and time spent than there is with paying the executive too much. Charity Navigator President Ken Berger is said to disagree “with the argument, popular among many nonprofits, that to attract top talent to manage complex organizations, they must compete with for-profit businesses.” A six figure salary is often cited as outrageous in the article so lets grant that you can find and retain talent for about $90,000. But is the government concerned that non-profits may be losing a series of talented to the for-profit world because those organizational leaders are only being paid $25,000?
There is an argument often made that the government should be turning over a lot of its functions to non-profits because they can do the work more efficiently. If that is the case, the government is likely to be increasingly concerned about the salaries of the top executives. But if they are going to depend on non-governmental social service agencies, they should also be sure that there is a certain standard of care being provided to people. That requires good training, but also appropriate pay to help maintain the continuity of delivering that standard. If they are going to care what is being paid at the top, they should also be concerned what is being paid at the bottom. But it is likely the government will focus more on the results than the process the company follows to obtain them. It is much simpler and more popular to target executive pay as the reason for substandard service delivery than other harder to quantify measures. Cost cutting is equated with money well spent but what works for sneakers has a different result in social services.
But in the arts, other than educational outreach, governments have a different agenda than they do with social services. Unfortunately, it is often appropriateness of content that often raises concerns rather than quality of services.
In any case, even though most of us have no fear of being accused of having too high a salary, the examination of non-profit salaries appears to be a continuing concern. It bears watching how it all unfolds.
"Though while the author wishes they could buy it in Walmart..." Who is "they"? The kids? The author? Something else?…