CEO salaries can be generous but pay is low at small outfits.

NON-profit doesn't necessarily equate to low pay.

The Business Journal s list of the 50 largest public non-profits in Los Angeles has 27 top executives making $200,000 or more. Top earner on the list: Deborah Borda, chief executive of the Los Angeles Philharmonic Association, at $660,000.

All told, the 51 top executives (there are two co-chiefs) on the list averaged $208,612 in compensation, which is more than twice the median for chief executives at all Southern California non-profits, according to a recent survey by the Center for Nonprofit Management.

"There is a very large discrepancy between what people are paid when they head the largest (and smallest) non-profit organizations," said Renata Rafferty, a consultant to both non-profits and large charitable donors.

At organizations with an annual budget of $500,000 or less, which accounts for half of all local non-profits, the median base was $52,000.

Executives at the largest organizations say big salaries are justified by the job: running organizations that are often just as complicated, if not more, than for-profit businesses.

"There are sound arguments that can be made for what they are being paid. These people are running quite large organizations," said Peter Manzo, executive director of the Center for Nonprofit Management.

Even so, million-dollar salaries at non-profits around the nation have led to some criticism--especially for executives running non-profit hospitals--and even the scrutiny of the Internal Revenue Service, which is conducting audits of organizations that pay more than $1 million or an amount not in line with their budgets.

This week, a California law went into effect that tightens financial regulations on non-profits with annual budgets over $2 million, requiring annual audits and the salaries of the chief executive and chief financial officer to be reviewed by the board or an authorized committee.

"Should people make more than $1 million? Should they make more than $200,000? That is a question for people to debate," said Stacy Palmer, editor of the Chronicle of Philanthropy.

Top pay

The second-highest paid local executive was Dr. William F. Ballhaus Jr., who made $628,000 in salary and bonuses in 2003 at Aerospace Corp., a research institute that does work for the U.S. Air Force. He was followed by James A. Thomson, who earned a $477,000 salary at the Rand Corp. think tank in Santa Monica.

Aerospace has more employees--3,000--than any other in L.A. County. Thomson also runs a large organization with 1,524 employees that also contracts with the federal government for much of its work.

Thomson, whose compensation is set by a board committee, said his job is similar to a university president. (Rand runs a doctorate program.) "You have organizations in Washington like the Urban Institute or the Brookings Institution, but they are much smaller and not as complicated or as large as this one," be said.

Board members and executives at the largest and most prestigious non-profits say generous pay is sometimes required to recruit top talent from the for-profit sector, where executives can draw several million dollars a year. Ballhaus' $600,000 compares with the $4.9 million salary of the chief executive at his former firm.

Borda, meanwhile, was joined in the top 10 by the heads of three other cultural institutions, including Gordon Davidson at Center Theatre Group of Los Angeles, who made $373,000. (A Philharmonic spokeswoman, Rachelle Roe, declined comment on Borda's pay and said Borda was on vacation and unreachable.)

Rafferty said the heads of top cultural institutions will often make more than counterparts at organizations that might be larger or undertake arguably more critical missions, such as at social service agencies. "You have to look at who populates the boards of the cultural institutions," she said, noting they often draw the wealthiest businessman and leading civic players, such as Eli Broad, who sits on the board of the Los Angeles County Museum of Art.

Andrea Rich, president of the museum, makes $301,226, placing her among the 10 highest-paid non-profit executives in the county.

Gil Cares, founder of the Geffen Playhouse, which paid its managing director $141,000 to oversee a theater with $6.1 million in 2003 expenditures, said running a cultural institution in Los Angeles is not the same as in other cities. "The people we have to deal with are the likes of Annette Bening, Debbie Allen, Peter Fall Jason Alexander," he said. "The appropriate salary has to be conditioned on getting the person who can do the job."

Service agencies

Few chief executives in health or social service non-profits made more than $300,000.

Among the exceptions: Rabbi Marvin Hier, who made $382,000 as dean of the Simon Wiesenthal Center, and John Fishel, who made $317,000 as president of the Jewish Federation Council of Greater Los Angeles.

Sister Joyce Weller draws no salary as director of the Daughters of Charity Foundation, whose $512 million in assets make it the third largest non-profit in the county. The Catholic-based charity funds a variety of programs for the underprivileged.

Terry A. Bonecutter makes $136,835 as chief executive of QueensCare, a health care provider that is the fifth largest non-profit with $357 million in assets.

"QueensCare has always been a very efficient organization and we don't have a lot of fluff," said Barbara Pulley, said senior vice president, who noted executives there share one agency van to shuttle to meetings--when it's not being used to cart health care equipment around.

Under IRS rules, a non-profit executive must be paid comparably to a person who holds the same position in a similar organization in the same or a similar community. Generally, boards comply through salary surveys, often conducted by consultants.

That's why, for example, Douglas Barr makes $263,000 as chief executive of Goodwill Industries of Southern California. Barr's salary is comparable to that of CEOs at other large Goodwills. "I am well paid. I am very well aware of that," Barr said. "(But) I didn't come into this business for the money. I would take my job for less than they pay me."

Top Earners

Executives at L.A.'s non-profits can receive pay comparable to
for-profits.

Name                               Organization            Compensation

Deborah Borda               Los Angeles Philharmonic
                                   Association                 $660,356
William F. Ballhaus Jr.          Aerospace Corp.                627,826
James A. Thomson                    Rand Corp.                  476,434
Rabbi Marvin Hier            Simon Wiesenthal Center            382,132
Gordon Davidson                Center Theatre Group             373,000
David Tillman                  Motion Picture and
                                 Television Fund                346,535
James T. Spradley Jr.      Children's Home Society of
                                    California                  340,000
Molly Forrest               Eisenberg Village/Jewish
                                Home for the Aging              323,494
John R. Fishel             Jewish Federation Council of
                               Greater Los Angeles              317,154
Andrea Rich                  Museum Associates (L.A.
                              County Museum of Art)             301,226

Source: IRS filings, via GuideStar