Are Jewish Charity Execs Overpaid?

A new survey of executive compensation at non-profits shows that top professionals at federations and other Jewish groups are among the best-paid communal, human-services and international relief fund-raising organization leaders in the country.
In response, some communal observers suggest that given the economic downturn in society and far lower salaries paid by comparable Christian charities, the Jewish professionals are overpaid. Others, though, say it is a positive sign that the Jewish community is able to pay salaries competitive with executives of for-profit companies, and that the best way to attract quality people to charitable work is through attractive financial payment.
According to the most recent annual survey of not-for-profit management, published Oct. 2 by The Chronicle of Philanthropy, Jewish federation executives in large cities were paid in the range of $200,000, plus benefits and expense allowance, to almost $400,000.
The chief executive of the United Jewish Communities, the umbrella group for North American Jewish federations, Stephen Hoffman, was paid almost $375,000 last year, plus given a $116,000 expense allowance. His predecessor in the job, Stephen Solender, was paid over $450,000 last year.
The previous year, when he was working as the chief executive officer, Solender earned $350,000, according to the Chronicle, whose numbers were based on tax forms that are public record.
John Ruskay, who heads UJA-Federation of New York, earned $350,000 last year, up from $329,000 the year before. The federation’s chief financial officer, Irvin Rosenthal, earned $242,000 last year.
The highest earner of all federation executives was Robert Aronson, CEO of the Detroit Jewish federation, at just under $381,000 earned last year, according to the Chronicle survey, which lists the country’s top 400 philanthropies.
The article includes compensation information on executives from Jewish federations in Baltimore, Boston, Miami, Palm Beach, San Francisco, Los Angeles, Atlanta, Philadelphia, Chicago and the MetroWest region of New Jersey.
The paychecks of heads of other Jewish organizations were also robust last year, according to the Chronicle: the Anti-Defamation League’s national director, Abraham Foxman, earned just over $357,000, plus another $22,500 in an expense allowance, down slightly over the previous year, though his organization’s income plummeted from $78 million in 2001 to $51 million in 2002. The Simon Wiesenthal Center’s top executive, Rabbi Marvin Hier, earned nearly $450,000 last year.
The high salaries of some Jewish organizational execs aren’t a new phenomenon. And these salaries are a far cry from the $148 million salary that forced New York Stock Exchange chairman Richard Grasso to quit last month.
But at a time when most federations and other Jewish groups are bringing in less money than they have in years past, and in some cases are cutting services, some wonder whether the amounts earned by these executives are out of step with new realities. Others, however, working closely with federation leaders say that the benefits they bring to the Jewish community are not adequately reflected in their paychecks.
"Especially in tough times, boards have to take a close look at salaries" and decide if they are appropriate, says Mark Charendoff, president of the Jewish Funders Network, which serves and educates philanthropists, and a Jewish Week board member.
Jeffrey Dekro, president of the Shefa Fund, a Philadelphia-based non-profit devoted to promoting socially responsible grant making, says he is worried that mid-range donors to federations (many of them the younger people who Jewish organizations are desperate to attract) are beginning to view hefty executive salaries as a poor use of their tzedakah dollars, and may direct their charitable giving elsewhere, even outside of the Jewish community.
"If we don’t get on top of it now, we’ll suffer much more for it later," said Dekro, whose group was recently ranked best among about 130 Jewish philanthropies by the watchdog organization Charity Navigator.
Dekro himself has taken several pay cuts in the last few years, going from a salary of about $95,000 three years ago to just over $85,000 now ó and says that in a time when many Jewish federations and other philanthropies are struggling to keep up their donations, more of their executives should consider doing the same, though few are.
But even Dekro says that for people managing multimillion-dollar budgets, "the amount they’re earning isn’t unreasonable."
The culture of non-profit executive compensation is complex, observers say.
The most influential federation contributors, who donate hundreds of thousands or even millions of dollars each year, often are members of the compensation committees that set the salaries for the federation heads. In these circles, a $350,000 salary is not thought remarkable. What’s more, some say that leading philanthropists only take seriously the federation professionals who are taking home sizeable paychecks.
"These are extraordinary public servants," says Morris Offit, chairman of the board of UJA-Federation of New York and a former chairman of both Johns Hopkins University and of The Jewish Museum.
"Seventy hours a week they expend efforts on behalf of the Jewish community. It’s not just the time, but the extraordinary efforts they make. I don’t know of any public servant more contributive to the welfare of the Jewish community," says Offit, who is CEO of a Manhattan wealth management firm, Offit Hall Capital Management. "These are all outstanding people, and they should be compensated better" than they are.
In the private sector, the work done by the New York federation’s Ruskay would be worth at least $1 million, he says.
Others note that senior rabbis in the community are earning $200,000 or more, as do principals of leading yeshiva day schools.
A notable feature of the Jewish organizational leaders on the Chronicle of Philanthropy list is the dearth of women’s names.
Of the 20 Jewish organizations listed among the roughly 400 in the Chronicle’s survey, just two are headed by women: Hadassah and the Jewish Communal Fund of New York.
In both cases, the women earned significantly less than executives at other listed groups. Hadassah’s executive director, Ellen Marson, has since left the position. But she earned $214,000 in 2002: far less than most of the male executives at Jewish federations and other groups, though nearly all of them raised less than the $82 million that Hadassah did that year.
Her subordinate, Hadassah’s chief financial officer, James Rothkopf, earned $3,000 more than she did, though they started working there at roughly the same time.
Susan Dickman, executive vice president of the Jewish Communal Fund, the endowment arm of New York’s UJA-Federation, earned roughly $180,000 last year. Her male counterpart at the Los Angeles Jewish Community Foundation earned $234,000.
Of the 14 Jewish federations listed, none are headed by women, and four list women in the number-two position.
"The scarcity of women on the list struck me," said Charendoff of the Funders Network. "There are big issues of women and professional leadership of the Jewish community. I don’t think this list has pointed out anything we didn’t already know, but it certainly drives it home in a very graphic manner."
He noted that "information which used to be enormously difficult to get is now available at the press of a button," adding that "not-for-profits are working in an age of growing transparency. Donors are using that information more and more to determine not just whether charities that they give to are fulfilling their mission, but whether they’re doing it efficiently and effectively."