Calling Out the Overpaid
When the Madoff scandal slammed the Jewish communal world like a ferocious storm just five years ago, there was a lot of talk about the need to strengthen governance of those not-for-profits who lost millions of dollars because of lax oversight of their investments. This past summer, when once-esteemed charity executives were charged with thefts and cover-ups, there were more calls for accountability, especially in organizations where the long-tenured chiefs seem to act with impunity.
Add the results of this year’s salary survey to the reasons why governance and oversight of Jewish not-for-profits must be improved.
Don’t take our word for it. Read the report online prepared under the auspices of Abraham Wyner, a professor of statistics at the Wharton School at the University of Pennsylvania, which independently analyzed five years of data and led us to draw some stark conclusions.
First, the gender gap in leadership and compensation can’t be explained away by saying that women earn less because they run smaller organizations. The Wharton analysis showed that to be only half true. Even after taking into account organizational size, women in the Jewish world are discriminated against, earning 20% less than they should, than they would if they were men.
Only one woman heads a major U.S. federation. Only one woman heads a major religious organization. At a time when women are achieving the world over — even running General Motors! — this persistent status quo is simply disgraceful.
Second, the salary structure is rife with inequality. Why should the (male) former federation head in South Palm Beach County have earned in 2012 nearly a quarter of a million dollars more than the (female) federation head in San Francisco, especially when she supervises more employees and a much larger budget? Never mind the list of men — and they are all men — who according to the Wharton analysis, are vastly overpaid and who appear impenetrable because they have been in their positions forever.
Which leads us to the third point: Experts say that governance controls in not-for-profits fail when top executives serve exceedingly long terms. Three of the four groups that faced scandals in 2013 had top executives in office for more than two decades. Boards, often packed with friendly and wealthy supporters, become complacent, and even if malfeasance isn’t involved, leadership isn’t challenged or shared.
Nor does it court the humble. Consider the comparison between Rabbi Marvin Hier, whose family brought home nearly $1.3 million last year alone from the Simon Weisenthal Center, and David Zwiebel, who supervises nearly four times as many employees at Agudath Israel and oversees a budget nearly as large. He earned $147,456 in 2012. “The rewards of trying to use one’s talents and energies to serve the Jewish community,” he told the Forward, “extend far beyond monetary compensation.”
As indeed they should. But it’s rare to hear that sort of humility.
In the end, all the Forward can do is continue the painstaking work of presenting this information as accurately as possible, and analyzing it with independent precision. It will be up to board members, donors, citizens and other community leaders to insist that the best practices of some Jewish not-for-profits are extended to all.
Transparency is a proven tool to improve governance. Brian Galle, an associate professor at Boston College Law School, recently analyzed The Chronicle of Higher Education’s top ten list of highly compensated university presidents and found strong evidence that appearing on the list depressed donations the following year. Once donors saw those crazy salaries, they were less likely to open their wallets.
We can only hope that once donors see the Forward’s list, they will reward those who they believe deserve it and withhold from those who don’t.