Times are still tough for working people in Northeastern Pennsylvania.
Unemployment in the Scranton/Wilkes-Barre Metropolitan Area fell in June to 9.2 percent, but the region’s jobless rate still led the state for the 39th consecutive month. Census figures, meanwhile, show Luzerne County’s median household income for 2007-2011 lagged more than $8,000 below the state figure, at $43,296.
The lean years of recession and austerity were not nearly as painful for those who led many of the region’s nonprofit entities, where base salaries in the $100,000 range were not uncommon, supplemented by benefits and bonuses.
A Times Leader analysis of publicly available tax records for a dozen well-known nonprofit agencies in the Wyoming Valley revealed variations in salary levels, program spending and other key data.
When Robert F. Durkin was heralded as the next president and chief executive officer of The Greater Scranton Chamber of Commerce last week, the announcement did not include what his salary will be when he takes over the nonprofit organization on Sept. 9.
Chamber board Chairman Dan Santaniello would only say that Durkin will be paid “substantially” less than his predecessor, veteran chamber head Austin J. Burke, who is stepping down after more than three decades in the role. Durkin’s compensation level was “benchmarked” against comparable positions in comparable communities, Santaniello added.
“I think it is a matter of keeping it confidential for Bob, because he is new to the job,” Santaniello said Thursday when asked why the board had chosen not to reveal how much Durkin, currently president of the Northeast Regional Cancer Institute, will be paid.
But the public will find out, eventually.
That’s because certain tax-exempt nonprofit groups, such as the chamber, must file an annual report with the IRS, known as a Form 990. That document contains detailed information on an organization’s mission, programs and finances — including the highest-paid employee, how many employees received more than $100,000 of compensation and how much was spent on programs, administrative expenses and fundraising, respectively.
“All of that is public information, and it is public information because the government believes it helps citizens judge the quality of the nonprofit,” including whether organizations are upholding their mission, said Kelly McBride, senior faculty for ethics at the Poynter Institute, a Florida-based nonprofit journalism school.
The only caveat is that filing deadlines are based on groups’ fiscal years, so between that and filing extensions sought by some organizations, the information often is more than a year old before the public has access to the form.
In the Scranton chamber’s case, its 990 form for the fiscal year ended June 30, 2012, reveals that outgoing leader Burke earned $354,406 that year, comprised of $304,958 base salary and $49,448 in other compensation.
A broad spectrum
Members of the public seeking 990 forms have a number of options. Organizations are required to make the reports available to the public upon request, and some go as far as posting 990s and other financial information on their websites.
There also are a number of groups that offer access to vast compilations of 990s and other data, including GuideStar.org and CharityNavigator.org, both of which were consulted for this news article.
Given the vast number of nonprofits — a cursory GuideStar search suggested there are hundreds in Wilkes-Barre alone — The Times Leader examined tax filings for 12 organizations of different sizes, representing a cross-section of services likely to have at least basic name recognition among Wyoming Valley readers.
They range from a relatively new undertaking such as Ruth’s Place, a volunteer-driven women’s shelter launched in 2003, to large, long-established groups, such as Catholic Social Services and Goodwill Industries, which employ hundreds of workers in charitable endeavors.
Executive compensation levels — comprised of base salary plus various bonuses, benefits and additional compensation — for the 12 groups ranged from $40,000 to more than $450,000, as shown in the accompanying charts. The information was drawn from the most recent 990 forms available, either from 2011 or 2012.
How do such figures compare with compensation in other sectors?
The median compensation level in our limited sample was $122,692, meaning half the CEOs were above and half below that dollar amount. That’s about $80,000 higher than Luzerne County’s household median income, tens of thousands of dollars more than what Wilkes-Barre’s mayor ($79,911) and police chief ($98,971) get paid, and about on par with what the Wyoming Valley West school superintendent earns ($123,552).
But it’s below the 2010 Mid-Atlantic region nonprofit median salary of $150,000, as calculated in a November 2012 CEO compensation study by New Jersey-based Charity Navigator.
‘No magic number’
Area nonprofit leaders who responded to requests for comment acknowledged that while some readers might view leading such entities as an unduly lucrative occupation in a financially troubled region, they find it to be a demanding career requiring strong organizational skills, dedication and passion.
Carmen Ambrosino, CEO of Wyoming Valley Alcohol and Drug Services, said his organization draws revenue from 73 funding sources.
Steven R. Nocilla, executive director of Catholic Social Services of the Diocese of Scranton, said part of his job entails working on 30 to 40 grant applications each year.
Kathleen Williams, executive director of the Wyoming Valley Children’s Association, spoke about leaving the private sector in exchange for lower pay and longer hours at a job in which she sometimes helps take out the trash.
Experts advise donors and other observers against jumping to conclusions about CEO compensation numbers in the six-figure range, saying those statistics are not the sole indicator of an organization’s financial health or commitment to mission — nor even the best indicator.
“We get those calls all the time,” Charity Navigator Vice President Sandra Miniutti said of questions about what constitutes excessive CEO compensation. “There is no magic number.”
And, Poynter’s McBride added, an increase in CEO pay might be a reflection of healthy revenues, buoyed by success in securing grants, donations and other funding to support an agency’s programs.
One of the key criteria emphasized by nonprofit observers is the amount of money an organization spends on programs compared with administrative and fundraising expenses.
Better Business Bureau standards for charity accountability recommend that an organization should spend at least 65 percent of total expenses on programs. Miniutti said Charity Navigator recommends a minimum of 75 percent.
All of the organizations examined by the Times Leader were above 65 percent, and all but two were above 75 percent.
But the question of CEO pay arises time and time again. Miniutti emphasized that a large organization serving a broad client base is more likely to have a better compensated leader than a smaller organization.
And, she said, it’s unrealistic to think “nonprofit” equals “volunteer,” as groups looking to do good naturally seek to attract the best talent for stewarding programs and soliciting funding from donors, grants and government agencies.
Longevity, workload noted
Nocilla has spent 27 years with Catholic Social Services, an agency that provides needy people assistance with housing, substance abuse, mental health and family issues throughout the 11-county diocese.
“I can’t remember putting in just a 40-hour work week,” he said.
According to the agency’s 990 for fiscal 2011, his total compensation package that year was worth $115,597, a figure which is vetted and approved by the agency’s board, he explained.
“If you look at it in the grand scheme of things, we’re probably one of the largest of the area’s human service organizations,” he said.
Among the 12 groups examined here, Catholic Social Services employs the most people — 255, according to its 990 form — and 91 percent of its spending goes to programs. Nocilla said he believes his compensation is “absolutely” fair, but he does not take it for granted.
“On the other hand, I do think about what other people make,” he said.
Ambrosino has been with Wyoming Valley Alcohol and Drug Services since 1973, when the salary was $6,100 and “nobody was doing newspaper stories about that,” he said. That amount would translate to about $32,000 in 2013 terms, according to a U.S. Labor Department inflation calculator.
Ambrosino’s compensation in fiscal 2012 was listed as $174,079 on the agency’s 990, but he said that figure represents a $138,000 salary plus the buyback value of sick and vacation time he has accrued over the years.
60-hour work weeks
He also said 60-hour weeks are the norm, and that he has been on-call 24-hours a day for the past four decades, in a field which requires him to be, in sports terms, “a player-manager” responsible for many tasks.
Ambrosino said he understands salaries generate “coffee shop talk,” and the result can be a black eye for administrators, such as himself, whose paycheck reflects longevity and dedication. “There are people in Northeast Pennsylvania who are making three, four, five times what I am,” he said of other nonprofit leaders.
Clearbrook Inc., another drug and alcohol treatment center whose tax forms were examined for this report, had six people on its payroll making more than $100,000 each year — versus only one, Ambrosino, at Wyoming Valley Alcohol and Drug Services — according to its filing for the year ended Dec. 31, 2011. At the top of Clearbrook’s six-figure staffers was CEO Nicholas Colangelo, whose total compensation was $462,954, according to the tax form.
Colangelo’s organization also is larger: 145 employees versus 37 for Ambrosino’s group, with $11 million in annual expenses at Clearbrook compared with $2.1 million in expenses at Wyoming Valley Alcohol and Drug Services.
A message left with Colangelo’s office seeking comment was not returned.
While Colangelo was the highest-compensated executive looked at by the newspaper, Williams, of Wyoming Valley Children’s Association, was one of the lowest, at $65,000 per year. Williams said she left a career in the banking industry that paid “considerably” more — she declined to say how much — to join WVCA about two years ago.
“We’d all like to make more money. But number one, I believe in the mission,” Williams said of the group, which provides early childhood education and therapeutic services to young children, some of whom have special needs.
Two of the agencies reviewed listed neither a highest paid employee nor any employees making more than $100,000 in their most recent 990s: Ruth’s Place and the Victims Resource Center.
A message left with the Victims Resource Center wasn’t immediately returned on Friday, although its 990 shows more than 80 percent of expenses spent on programs, 22 employees and total management and general expenses of $195,878.
Ruth’s Place director Kristen Topolski, meanwhile, admitted she wasn’t thrilled to have her current salary published in the newspaper, but freely offered the number.
“I make $40,000,” she said with a slight sigh. And that places Topolski at the bottom of the salaries reviewed for this article, below even the county’s household median income.
According to its 990 for the year ended Dec. 31, 2011, Ruth’s Place had $244,102 in expenses, of which 92 percent was spent on programs. Just $18,557 was recorded as management and general expenses that year, when Ruth’s Place reported having eight employees and 35 volunteers.
What began 10 years ago as a seasonal, all-volunteer operation has seen significant increase in demand for its services as it grew to include paid employees, year-round operation and a dedicated home in Wilkes-Barre’s North End.
Topolski reported last month the shelter cared for 292 women in 2012 — a number set to be surpassed this year, when Ruth’s Place has been at its capacity of 21 women every night since the beginning of the year.
That growth culminated, last month, in a merger between Ruth’s Place and Volunteers of America, a move Topolski said would allow the burgeoning shelter to draw on the administrative expertise of the older, larger VOA. The transition won’t change the shelter’s mission, Topolski said, including a critical lesson volunteers impart to women struggling to rebuild their lives.
“We teach the women who we work with here how to live on restrictive budgets, because that’s exactly what we have.”