How Much is Too Much? Salaries of Execs in Jewish Not-for-Profit Organizations

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Jewish charity and educational institutions turn to our community for donations in order to fulfill their important missions. We write our checks, and feel proud that we are able to help. We trust that the recipient agencies are using our money wisely, and do their best to make this a better world. To a large extent, I think our trust is justified.

To a large extent, but not totally...

The June 19, 2009 issue of the Forward included an article by Anthony Weiss on the salaries received by executives of some of our major not-for-profit institutions. Weiss pointed out which of these executives "shared the pain" by reducing their own salaries at a time when some of their employees were losing their jobs due to the financial crisis.

Here are several bits of information provided by Weiss' article:

Richard Joel, President of Yeshiva University, has a salary of $676,004. While Yeshiva has laid off 60 employees, Mr. Joel has taken no cut in pay. Howard Rieger, Chief Executive of the United Jewish Communities, has a salary of $555,000. UJC has laid off 31 workers in the past year. Mr. Rieger has taken no cut in pay. John Ruskay, the top executive of UJA-Federation of New York has a salary of $419,000. UJA-Federation has laid off 53 workers during the past year. Mr. Ruskay has taken no cut in pay. The article lists 18 executives who earned $250,000 or more, 8 of whom took salary cuts of up to 10%; 7 of whom took no pay cuts; and 3 who declined to disclose this information.

I subscribe to the notion that Jewish not-for-profits need to pay proper salaries to their employees. Unless proper compensation packages are offered, these institutions will not be able to attract the best and the brightest executives. Good executives are essential to the fulfillment of the missions of those organizations for whom they work.

However, I do question what constitutes "proper compensation". I recently read that President Obama's salary as President of the United States is $400,000 per year. With all respect to the executives in Jewish organizations, none of their jobs compares in difficulty and responsibility to that of the President of the United States.

The problem gets stickier when we realize that the top executives of our not-for-profit institutions have other lower level executives on their staffs. If the top executives are making huge salaries, we can suppose that their vice-presidents and assistants are also making healthy amounts of income. This means that every time we make a contribution to these institutions, a significant chunk of our donations go to support the executive team. We understand the need to pay for "overhead"; otherwise the institutions could not function well. We even understand the importance of paying respectable compensation packages. But it is more difficult to get enthusiastic about making donations to institutions whose chief executives are being paid salaries of four, five, six hundred thousand dollars and more. And we assume that these salaries are also accompanied by handsome benefits packages above and beyond the salaries.

Perhaps one of the reasons salaries are so high is that the Boards of these institutions are often composed of very wealthy people. They may be earning millions of dollars a year and have vast estates; to them, four hundred or six hundred thousand dollars doesn't sound like all that much. Even baseball players get paid millions of dollars a year; so what's the problem with offering a half million or more dollars to our executives?

But what about those millions of people who don't earn astronomical amounts, and who are asked to make donations in order to support extravagant life-styles for the executive staffs of the institutions who are asking for their donations? And what if they lose confidence in the idealism of those executives who take huge salaries, even at a time when they are laying off workers? People might naturally ask: "why should I be donating money to these institutions, when I'm struggling to pay my own bills, to pay my children's day school tuitions, etc.? Yes, I really do want to do my share by giving tsedaka to charitable causes: but do I really want to see my tsedakah dollars go to executives and administrative staffs that are taking so much off the top?"

Anthony Weiss' article is a wake up call to our community. We need to think very carefully about how we maintain our not-for-profit institutions. It would be good if Mr. Weiss would write a similar article about compensation packages of principals and administrators of our day schools and yeshivot. Given the immense sacrifices parents must make to pay day school tuitions, they need to know that those who administer our schools are being paid fairly, but not extravagantly. If our community is to fund our institutions and schools--as indeed we must--then we need to know that the funding is being managed in a responsible and respectful way.

What do you think? Please share your comments on the blog.