Someone forwarded me Autism Speaks’s 990 form from 2008. For those of you who don’t know much about U.S. tax law for nonprofits and various reporting requirements (which I don’t really either), nonprofits must file a 990 every year to show things like contribution revenue, program and administrative expenses, etc. It’s quite a bit like corporate tax forms but with data that applies only to nonprofits (e.g., donations). It is a requirement that their 990 be made publicly available by the nonprofit, and most larger ones publish it on their website, though not necessarily prominently.
These things are generally boring as dirt to read. If you know what you’re looking at, it is, however, a good way to see whether a nonprofit is spending their donations wisely and effectively. This can help you decide where to get the biggest bang for your donation buck, especially if you’re deciding between multiple charities.
Usually the juiciest info to read is executive compensation. Nonprofits must list the compensation given to all their officers and ‘key employees’ (basically, the people who make the most money), board members, trustees, etc. You can get a sense of the mindset of a charity based on whether their compensation packages seem reasonable or not. Some border on the profane.
All that brings us to Autism Speaks’s 2008 990 form. My dislike for Autism Speaks is not exactly a state secret. And I don’t feel like diving into that editorial today. I primarily want to draw your attention to some actual data, and you can make your own conclusions.
[Lots of math and disbelief below the fold.]
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On page 1, notice lines 12 and 15. According to this, Autism Speaks brought in a little over $66 million last year in contributions and grants and other revenue. This was about $22 million more than last year. Now notice line 15. Their total compensation paid out went from $7.6 million last year to $17.8 million this year. In and of themselves, these raw data might not mean much. Raising more money means your organization likely grew and you’d need to pay out more salaries.
I worked for a major nonprofit who shall remain nameless many years ago. On 990s, the ‘this vs. that’ ratios are key to everything. (e.g., how many cents did you spend to raise each dollar of donations; how much money did you spend on programs for the people you serve vs. administrative expenses) These ratios show how one piece of data has increased or decreased relative to another. This is where charity watchdog groups can kill you. They have percentages they expect and deem good or bad and rate you accordingly.
(Note – the math on this next part isn’t perfectly precise because it’s a little more complex than just dividing two numbers, but this would still be very close to reality.)
Unless I’ve forgotten how to divide, this means that Autism Speaks spent approximately 17% of their revenue last year on compensation. Not great, but not that bad in the broader nonprofit world. This year?
27%
To give you some context about averages in the overall nonprofit sector, this is pretty bad.
Now scroll down to pages 8 and 9. This is where they show the compensation for individual people. There are lots of $100,000+ people on the payroll. Their president made $366,000. I’ve seen worse, though usually for nonprofits bigger than them, but they need to keep in mind that many of the people they supposedly serve (autistic persons and their families) are filing for bankruptcy and skipping meals and paying outrageous medical expenses on a regular basis.
The one that the person forwarding the e-mail to me drew to our attention was Dr. Geraldine Dawson, the Chief Science Officer (written as Geri Dawson on the form). $644,264?!
The 990 reports that about $270,000 of her compensation was a one-time relocation expense. OK, so that reduces her ‘normal’ annual compensation to about $370,000. Two comments – 1) This is supposed to make us feel better?, and 2) OK, who on earth needs $270,000 to move? What did they do, buy a teleporter and beam it there? Hire hundreds of laid-off parents to carry everything and walk it there?
If my math works out right, 16 people combined to make $3.1 million dollars at Autism Speaks last year – an average of close to $200,000 per person. That would sure buy a lot of therapy and supplies, and for that matter cover a lot of food, debt, and rent or mortgage payments.
Way down near the end, they added a paragraph about how they based their compensation off of other nonprofits, instituted compensation structures based on similar nonprofits, they seek to pay people competitively, etc. Everybody says this, and anyone can justify their compensation plan based on data from somewhere. This sounds almost verbatim like the justifications used for exorbitant compensation packages paid out to bank CEOs. And such justifications to me are absolutely irrelevant to the conversation. How about this rule instead:
Look at what you pay to your highest-paid people and then look at the people you serve and ask yourself, is this morally consistent with our mission and the needs of the people we seek to help?
Clearly you can tell how I feel about this. To me this is like reason #27 that I have strong, negative feelings about Autism Speaks. But, make up your own mind. Read the 990 and decide for yourself.
But with autism-related nonprofits sprouting up all over the place, this issue transcends Autism Speaks. We should develop an ethic for all nonprofits who devote their mission to autism for not only basic principles of using donations wisely and effectively, but also in how we honor, respect, and value autistic persons and those that love them. Budgets and financial reports are documents that reflect our ethics and what is most important to us. We can say all the right words, but this is where our commitment is proven or not.
If I have erred in my analysis here, let me know and I’ll correct it.
{ 3 comments… read them below or add one }
I’m more of a 2 + 2 person myself but it’s useful to have a comparison. I do know that non-profits ‘have to’ offer competitive salaries in order to attract well qualified candidates but even so……
Maddy – I think I’m about to write a comment that is more an excuse for me to pontificate some more on this issue than it is a response to what you actually wrote. My apologies in advance.
I’m a fair amount less directly involved in the nonprofit world now than I used to be, but salaries will always be a controversial topic there. I know among the rank-and-file employees, having a consistent pay policy is very important, especially since most of the time they make a pretty modest wage. But passion in and personal fulfillment gained from participating in the mission is at least as important a part of the ‘compensation’ package. I was attracted not by the salary offer but by the mission. When the focus of one’s employment or hiring is largely or solely on money, I think everybody ends up losing out.
I guess my question is, how much money is enough?
It seems like the best leaders would look at it like, “how much value am I contributing to this organization as a leader?” instead of “is my pay comparable to the Vice-President of Organization A?” The former is mission-centric, the latter is ego-centric, and the organizations that live with leaders in the latter category almost always suffer for it. I’ve seen it too many times. Those values may work out to be the same number or they may not, though I can’t even come up with a scenario in which some of those salaries are appropriate. Regardless, I still think how you ask the question matters.
I’ll never accept the reasoning that some people give that “this is how the world works.” You can find great people with incredible skill all over the place. One of the lessons autism has taught me is that as a society we allocate value and personal worth all wrong. And it seems like doing things the same way they’ve been done is the last thing we need right now.
OK – I’ve gone on plenty long enough.
Why not make copies of this and hand them out at Autism Speaks walkathons? That would certainly target those who are directly involved in supporting such abuses. Talk is cheap actions are efficient.