"...the payment was authorized after the board compared Shrage's compensation over the past decade with that of leaders of similar nonprofits and determined he had been consistently underpaid."One "compensation consultant to nonprofits" advised that the IRS "...permits nonprofits to do a 'look back' to determine if their executives have been underpaid, and to make up the possible difference."
OK, then. If CJP leaders don't mind that, as one expert noted, "Shrage's payment 'has very negative optics for the organization,'" and I'm sure they could not care less, and assuming that few believe, as did the Director of Georgetown's Center for Public and Nonprofit Leadership, who told The Forward that this $1.34 million payment was "'ridiculous' and 'above and beyond what is normal,'" what are the potential implications?
- While I don't see this "look back" as creating an avalanche of the same or more by a multitude of federations (after all, whose compensation and benefits numbers did CJP's leaders look at if not those some of the Large City Executives and, of course, the leader of the pack, JFNA), one never knows. I continue to believe that when the Large City Executives meet at some golf resort for their annual "retreat," one of the off-line discussions must always be who is making what and what more in the way of benefits might they enjoy? Who knows.
- For example, Barry also enjoys "chauffeur services" in addition to "an auto allowance or leased vehicle." We know about the City clubs, the Country Clubs, the business or first class air travel, etc. What's next -- a parsonage?
- My personal experience suggests that nothing angers donors within our system more than when CEO compensation numbers are revealed in The Forward or local business journals. No one can possibly quantify the donor and dollar losses attributable to donors disgusted with the compensation and benefits disclosures but system-wide they must be in the millions over time.
- Then there is the reality that in too many instances, not with Shrage whose value to Boston's federation is deemed by that leadership to be beyond measure, where compensation has no relationship to performance. Enter Jerry Silverman. Certainly the Boston compensation consultant entered Jerry's "package" into the mix; and just as certainly, no one noticed that Silverman is and has been among the most egregiously overpaid within the nonprofit world. Were I a federation CEO, I would view Silverman's compensation as the paradigm for which I would strive -- oh, to be overpaid in such an outrageous manner.
Yet, at some point there is certain only the possibility that CJP's action here will become the canary in the coal mine; that federation (and, unlikely, JFNA) lay leaders will look at the totality of what is being paid to their top professional leaders and say: "what the hell are we doing? This has to stop."
OK, so that probably won't happen. But a guy can dream, can't he?
Rwexler
* The newspaper stories revealed that "[O]ver the past decade, (Shrage) has generally earned between $400,000 and $500,000 a year," not exactly chump change, and, arguably, at an appropriate compensation for the years in question
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6 comments:
The concept of a "look back" is nothing more than a bonus. You can put lipstick on it or call it whatever you want. Increasing Shrage's salary to market is understandable. But what possible justification for a look back? The look back did not create benefit for the federation.
As a donor, you just told me after we pay overhead, the next million plus raised goes to Shrage?
And Shrage is such a top notch Jewish professional that he either asked or even agreed to accept?
No thank you. I will pass. And I will pass until Shrage is gone.
Shrage followed in the footsteps of Ruskay (perhaps others too?) who also benefitted from a "look back."
The title of this post is actually quite connected to the previous one (collapse of a community). Used to be that the #1 priority (not just in the Jewish sphere, but the general sphere as well) was "community". We looked out for one another and inherently saw the value in the collective providing for us in ways that we could not do by making Shabbat for ourselves.
Now, sadly, both America and the more conventional aspects of the American Jewish community seem to emphasize the corporate model over everything else. This is a model where CEOs are paid an obscene amount of money, both absolutely as well as relative to the wages and compensation of the average worker in that organization. It's survival of the fittest and the big goal is to accrue as much as on an individual level as possible.
It's no wonder young American Jews are turned off to Federations if this is the bed that Federation CEOs and their boards choose to sleep in. Their models are much, much less hierarchical. Someone should ask Shrage or Silverman about the average compensation for typical administrative assistants or entry level workers at CJP and JFNA. Do they receive yearly raises, and if so do they even keep up with COL or inflation? How do those raises compare to the most senior level folks and the CEO?
Heaven help us if our ideal model of an American Jewish organization is Chase Bank or that its CEO prototype be Jaime Dimon (who ought to be prison). We deserve far, far better.
We can't have it both ways-- we can't expect top talent in positions that are far from being appropriate for the "faint of heart" while expecting to pay. It does not contradict the idea that, yes, administrators, campaign professionals, planners and other professionals in our field deserve quality compensation as well. Barry, for example, is a 30 year veteran who oversees an operation with a $55 million annual campaign and near $1 billion endowment (according to CJP's website). I don't know if Barry is worth what he is paid or shored up to, but his Board, which I expect is made up of smart and responsible leaders and philanthropists determined that. It may have impact on what people choose to donate based on perceived ideas that non-profit professionals and execs should only make X. I think you get what you pay for-- please consider watching the much touted TED talk below. An additional article that is very respected in the field from the Stanford Social Innovation Review is linked below too.
https://www.ted.com/talks/dan_pallotta_the_way_we_think_about_charity_is_dead_wrong
https://ssir.org/articles/entry/the_nonprofit_starvation_cycle
To Anonymous 3:24
There's getting paid well and then there's getting paid obscenely and lavished with so many perks. I get that the Exec needs to be able to move among the highest echelons of the community--the better to schmooze, build relationships, and the $$ that will follow.
The average worker in the Jewish federation world sees none of this and if the primary breadwinner that individual and his household are often not thriving economically. Yet without these very hard working men and women who often toil anonymously our system would collapse tomorrow.
Richard, it's probably impossible, and certainly JFNA would never do it but were the data available someone should do a "disparity index." This would measure the difference between the compensation of CEOs at JFNA and the federations and the next highest compensated professional and the least compensated professional. There can be no doubt that these CEOs have demonstrated genius in taking care of Numero Uno but that's where their concerns end.
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