Non-profit woes not hurting pay.

As non-profit organizations continue to feel the pinch of tighter corporate and philanthropic donations, many of the people who run L.A.'s museums and charitable organizations appear to be holding their own - and then some.

Based on the most recent tax filings with the Internal Revenue Service, L.A.-area salaries are routinely running in the $250,000-$400,000 range - still well below top-level compensation in the private sector but noticeably high among those who believe that non-profit work should call for more modest wages.

"I would like to have an opportunity to receive their tithes to put to use on our social service programs," said Lt. Col. Alfred Van Cleef, division commander for the Salvation Army Southern California, who, with his wife, makes a combined $42,000. "That would delight my heart."

Among L.A.'s most prominent non-profit executives, Barry Munitz, president of the J. Paul Getty Trust, is likely at the top spot, with a salary for fiscal year 2000 - the latest figures available - of $625,508.

Andrea Rich, president, chief executive and director of the Los Angeles County Museum of Art, makes $385,000 this year and lives rent-free in a Hancock Park house that would go for $48,000 a year if leased on the open market.

Jeremy Strick, director at the Museum of Contemporary Art in downtown Los Angeles, makes $382,000 for fiscal year 2002.

And Douglas Barr, chief executive of Goodwill Industries Southern California, received $242,800 for fiscal year 2002.

Compensation in the non-profit sector has been a sensitive issue in recent years, especially as salaries for the higher profile positions push into the mid-six-figure level. "For some, the idea of paying non-profit executives salaries that rival those in the business world is absurd," said Peter Frumkin, an assistant professor of public policy at Harvard University who tracks non-profits.

Budgetary Woes

"This side of the argument," Frumkin writes in The Public Interest, "concludes that non-profits cannot responsibly devote substantial charitable resources to paying their employees when the same resources could in many instances be used to serve needy clients or fulfill the organization's mission."

Bolstering this argument have been recent financial scandals at the United Way, the American Red Cross and the NAACP - not to mention the budgetary woes of many organizations this year stemming from the sluggish economy and the slumping stock market. MOCA, for example, had a $4.2 million deficit for the fiscal year ended June 30, 2001, and its fiscal 2003 budget will be reduced to $13.5 million from $16 million a year earlier.

But there is another side to the compensation debate - the view that the non-profit sector needs to pay competitive salaries if it is to attract and retain the top talent. "To get the best people' Frumkin said, "you have to pay serious money."

This appears to be the prevailing view even at a time when many non-profits are falling on hard times.

"Generally speaking the salaries you are talking about are not astronomical," said Todd Cohen, editor and publisher of Philanthropy Journal, a publication that tracks the philanthropic world.

Steven Langer, whose management consulting firm, Abbott, Langer & Associates, does an annual survey of non-profit salaries, says executives' compensation levels depend on the organization's budget, staff and location.

"The median salary of a non-profit CEO nationwide is $75,000," he noted. "However when you go to organizations with 1,000 employees or more, CEOs earn at least $176,150. And the top quarter of those CEOs that have more than 1,000 employees earn between $230,006 and go all the way up to $600,000."

'I earn every penny'

Aside from confirming the IRS data, representatives of many L.A. non-profits had little to say about compensation. Munitz, Rich, Strick and Koblik declined comment. Those who did comment, however, staunchly defended their wages.

"I earn every penny I make," said Jack Shakely, who makes $240,000 a year as president of the California Community Foundation in Los Angeles. "I could make twice as much on the outside."

Shakely, who has 40 employees, a $7 million budget and gave away $65 million in grants last year, said chief executives at non-profits receive no stock options and often don't have a retirement plan. "We are some of the lowest paid professionals," he noted.

At Goodwill Industries of Southern California, President and Chief Executive Douglas H. Barr said he didn't enter this kind of work to earn money.

But he's not unhappy with the $242,000 he earned last year, which included a $22,000 bonus for meeting strategic goals. He also has a company car and 10 percent of his salary is added to his pension plan.

"I think I'm adequately paid for the work I do," said Barr, who oversees 1,300 employees and has a $43 million budget. "We also have a bottom line of making money to carry out our mission and social goals, which is to train unemployed and underemployed people for whom employment is difficult."

Barr noted that Goodwill's board sets the salary for the chief executive. "The board has to pay what they have to pay to retain competent people, and they don't feel like they have to apologize for the salary they offer the CEO' he said.

Rich's $385,000 salary for fiscal year 2002 is actually a decline from the $412,000 she made a year earlier, and which included an unspecified bonus. In addition, there is the Hancock Park home that, according to LACMA's IRS filing, "she uses to host numerous fundraising/capital campaign events and organizational meetings throughout the year." The residence "is a condition of employment and used for business purposes," the filing concludes.

"Her salary is normal for a museum of this size," said Jim Rawitsch, vice president of external affairs at LACMA, which has a budget of $38 million. "And the house she occupies is used for meetings and fundraising."

Rich was head of LACMA when the Vincent Van Gogh exhibition came to the museum in 1999, boosting membership to 120,065. This year membership is expected to drop to 70,000.

If anyone scoffs at the salary earned by nonprofit executives, they can take heart in the wages earned by Van Cleef and his wife, Salvation Army Lt. Col. Sherryl Van Cleef. They live rent-free in a two-bedroom parsonage in Torrance, which would go for $25,725 on the open market. They drive a Salvation Army-owned car.

Van Cleef has been with the Salvation Army for 41 years and remembers his first paycheck, which was a little more than $100 a month.

"I entered the Salvation Army knowing what the financial remunerations would be," said Van Cleef, who oversees 900 employees and a $58 million budget.

As for whether pay cuts in the non-profit sector are in the offing, especially with the prospect of reduced operating budgets, Barr said he meets every three months with other non-profit executives and the topic has never been mentioned. "I have heard people talk about the fact that there are no pay increases, but I haven't heard anyone talking about pay cust."

Salaries At The Non-Profits

Several heads of local organizations are compensated well.

Name                      Organization                 Salary

Andrea Rich       LA. County Museum of Art            $385,000
Jeremy Strick     Museum of Contemporary Art          $382,190
Walter Timoshuk   Norton Simon Museum                 $300,000
Douglas Barr      Goodwill Industries So. California  $242,800
Jack Shakely      California Community Foundation     $240,000
Irene Hirano      Japanese American Museum            $165,000
Alfred Van Cleef  Salvation Army So. California        $42,000

Source: Business Journal research