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In deciding Hier’s salary, the center’s board compared his pay with the top compensation offered by other leading Jewish groups: ADL, the American Jewish Committee, the American Israel Public Affairs Committee and the Presidents Conference. This choice reflects the group’s view of itself as being comparable in influence, if not in revenue, with the largest and most powerful organizations in the Jewish world. The board added considerations based on Hier’s seniority and fundraising accomplishments.
Similar considerations led the ADL to decide that 73-year-old Abraham Foxman, its national director, is worth $688,280 a year. Even for a $50 million operation with 417 employees, this figure is 70% higher than the predicted compensation level. Foxman, one of the most visible Jewish leaders, whose influence extends beyond the group’s original mandate of battling anti-Semitism and bigotry, has been one of the highest-paid Jewish executives for years.
“Abe is the face of the ADL,” said an ADL board member who asked not to be identified. “He brings in the donors, and he is the one invited to the White House when they want to talk to the Jewish community.” This special status could, the board member noted, explain the generous compensation, which has to do more with Foxman’s stature in the field than with his organization’s size.
The ADL declined to comment on this issue.
Lampkin said that the Internal Revenue Service does allow not-for-profit organizations to take into consideration other factors beyond size when determining executive salaries, including the competitiveness of the position and the leader’s fundraising abilities. The most important test for the board is being able to explain how compensation was determined based on data and information from comparable organizations. “It’s all about the thought process, and everything has to be within reason,” Lampkin said.
Salary levels, however, are rarely scrutinized by the IRS, whose resources for dealing with tax-exempt organizations are overstretched. It is the donors, therefore, that have the most influence in limiting excessive payments for top executives.
Morton Klein, 66, has been at the helm of the ZOA for almost two decades. The organization, known for advocating against the Oslo Accords with the Palestinians and for backing the Israeli settlement movement, runs on a small budget, slightly more than $3 million in 2012. It has 31 employees working on pro-Israel advocacy, campus activism and communal education. Klein’s salary last year was $435,050, 93% more than the predicted salary for an organization this size.
According to Klein, this payment represents, in part, compensation for his first five and half years at the ZOA, during which he worked for free. “I took over a bankrupt organization with no money in the bank and with very little activity,” Klein said. The ZOA has an unusual arrangement under which most of Klein’s salary is covered by a designated gift from one of the organization’s major donors.
Another small organization writing a big paycheck is the RJC. The $10 million, 17-employee group paid its executive director, Matt Brooks, $563,000 in 2012. This salary comes from two related organizations, the RJC and the Jewish Policy Center, an affiliated think tank. Brooks, 48, took over as executive director in 1990 and has been credited with growing the organization rapidly in recent years, thanks mostly to large donations from billionaire Sheldon Adelson.
While political success is hard to measure, the RJC views Brooks’s tenure positively, noting the 30% of Jews who voted for Mitt Romney in the 2012 elections. “We don’t think he is overpaid,” RJC treasurer Mark Lezell said. “We think he is worth every bit of it.” Lezell explained that the board determines Brooks’s salary after carefully considering comparable executives and taking into consideration his performance.