September 2007 No. 40Table of ContentsUnited Ways raised $4B in 2006 Nonprofits – more like for-profits? Will the real budget please stand up! Hoosier economy on the way back? |
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Giving to United Way campaigns across America rose 2.7% last year to $4.14 Billion, reports United Way of America. Though the increase did not top the inflation rate, it was the second year of growth for the national network of community-based human service organizations. The Seattle area UW topped the list with $123.5M, a 25% increase over 2005.
Although the leaders of America’s not-for-profits don’t bring in near the salaries, bonuses, and perks of their for-profit counterparts, compensation for leaders of nonprofit hospitals, universities, foundations, and national groups are edging in that direction, reports The Chronicle of Philanthropy. The self-reported survey of the newspaper’s Philanthropy 400 was augmented by data from the Foundation Center and reports from a dozen watchdog and trade associations that focus on charities. The survey’s database is at http://philanthropy.com/premium/stats/salary for Chronicle subscribers.
From 2002 to 2006, top nonprofit inflation-adjusted executive take-home pay only grew 5%. For the 250 largest nonprofits that provided two-year data, the 2006 mid-point compensation package for top staff was $316,000, just under 2005. In top for-profits, the annual growth was also stagnant, according to a study of Standard & Poor’s 500 companies with the same executives over 2 years.
Bucking tradition, the highest pay went to New York’s Metropolitan Museum of Art director—$4.6M—not to physicians at major medical research centers and university presidents as usual. Often it was to the investment officer. All together, one-third of the 90 reported compensation packages of $500,000+ exceeded $1M. About 1/8th of the studied nonprofits paid bonuses to their chiefs in 2006, which in general increased 25% over those in 2005. This reflects a trend to tie executive compensation to organizational performance.
No United Way executive topped the half-million mark in total pay, but two of the reporting 44 exceeded $400K, including United Way of America. Yet, only 6 reported that the top staff’s compensation was ½% or more of their United Way’s total income—campaign, investments, and grants—and all were under 1%.
Of course, only a fraction of America’s million+ nonprofits has a budget over $500,000, and their top professional leaders rarely have 6-digit pay.
The Bush administration will probably report ending FY 07 with a $158 Billion deficit, some $90B below last year. But don’t believe it, says Allan Sloan in Fortune. It’s what he calls WAAP—Washington Accepted Accounting Principles—not what the USA’s balance sheet would show if it were a publicly-traded corporation according to typical accounting rules. The “real” deficit is $400 Billion or more.
Why? The WAAP doesn’t count several IOUs. First, Social Security will take in about $78B more than it will pay out. The US Treasury “takes that cash, gives the trust fund IOUs for it, and spends it.” That $78B isn’t in the stated deficit. Then the Treasury gives IOUs instead of cash for the $108B in interest earned on the Social Security trust fund. That’s not counted in the WAAP either. Finally, the $97B increase in Treasury securities held by “other government accounts” (e.g. federal employee pension funds) are not counted either. “Don’t you wish you could keep books this way at home?” Sloan asks, cringingly.
With Medicare and Medicaid looming to be 20% of our gross domestic product in 2050—more than today’s entire federal budget—the federal government stack of cards will fall down, Sloan says. Why do politicians think Americans can’t take straight talk?
Jobs are on the rebound in Indiana, but there’s been little real wage growth since 2001, says a new report from the IN Institute for Working Families. See www.ichhi.org for The Status of Working Families.
Mid-point household income for Hoosiers is the lowest among its neighboring states, and median hourly wages declined in 2006. While 110,000 high-wage manufacturing jobs have not returned, overall jobs have come within 1% of pre-2001 recession levels. Education and health services have added 55,000 jobs.
Getting a good-paying job without a college education is becoming far more of a challenge in today’s economy. Those with high-school or less “have fared the worst since the recession,” the Institute reports, “experiencing wage losses and higher unemployment rates.” Rates for blacks are twice as bad as for whites.
More Hoosier families with children are now living below the federal poverty level, which itself is only half what’s needed to be self-sufficient. Nearly one of every six of our kids now lives in “official” poverty.
Up. Oh, really! I didn’t know. Well, now we have the stats to back up what we’ve been experiencing. Hospital service costs averaged 6.2% growth each year from 1998 to 2004 for Great Lakes states, according to a new report in the journal Health Affairs. At the same time, prescription drug prices jumped 11.5% annually for the region. Compared to the nation (5.7%), Indiana’s Medicare personal health care spending grew more per enrollee (6.2%), but as a share of the state’s total personal health care spending Indiana (18.8%) was under the USA average (19.6%) in 2004. The gap was even wider in Medicaid—14.5% of all Hoosier healthcare spending compared to 17.4% nationally.
How to pay for the nation’s costly health care is a growing political issue. Presidential candidates are proposing a variety of plans—from tax-breaks to universal coverage—while Congress and the White House seek common ground on the future of the Children’s Health Insurance Program, with an Indiana eligibility expansion in doubt. The Health Coverage Coalition for the Uninsured includes AARP, the American Medical Assn., U.S. Chamber of Commerce, Blue Cross & Blue Shield, Johnson & Johnson, Pfizer, and a long list of “who’s who” in medicine. For the growing consensus, see www.coalitionfortheuninsured.org.
Though only one-fifth of the 1,000+ Hoosier business leaders who were asked actually responded to the survey, an 18-month project gave MBA students real-life perspectives, and their report will set benchmarks for future study. Here’s what came from corner offices:
Get the detailed report at www.inceosurvey.com.
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