New model needed for nonprofit compensation
by Brian Basinger
With all of the news of LGBT and HIV community institutions struggling and even closing, the sustainability of these organizations that anchor our movement for social justice and equal rights is a relevant topic worthy of community dialogue. Let's start the conversation by focusing on our current model of executive director compensation and envisioning more sustainable models that better serve and lift up all members of our communities now and into the future.
To be clear, directing a nonprofit is truly one of the toughest jobs you will ever love. Our communities need to do more to uplift and support these courageous individuals who have the strength, intelligence, will power, stamina, and naiveté to step into public service. We can support the individuals making this sacrifice while at the same time examining the systems in which they must operate to determine if there is a better way to ensure that community needs are being addressed effectively and efficiently.
There has been an exodus of LGBT leadership in our community organizations. We have recently seen executive director departures in at least nine organizations: Under One Roof, Maitri, New Leaf, Equality California, Academy of Friends, San Francisco AIDS Foundation, Lyon-Martin Health Services, Tenderloin Health, and San Francisco Pride. (One of those, New Leaf, ceased operations altogether and Lyon-Martin is teetering.) While I understand an individual's need to change and grow and appreciate organizations sometimes need fresh ideas, I am concerned at what seems to be a rather large and rapid draining of our executive experience. It is important to ask if there is something more than just the ordinary ebb and flow of individual careers. Most, if not all, of these departures are tied to a decrease in organizational revenue. What is it about our system that leads to executive director departure just when the organizations and community need their experience most to help survive the downturn?
It is possible that our system of executive compensation undermines organizational stability while at the same time weakening the mission. Compensation is often tied to organizational budgets so that executive directors become focused on fundraising at the expense of the mission.
We must take into account the reality of the dynamics of social class. Human beings have a strong tendency to adopt the values and interests of their social class. As executive directors start making six-figure salaries, they spend more time with their high-income peers and naturally start adopting those class interests. In order to maintain an ever increasing revenue stream, and their increasing personal income, directors spend more time courting wealthier donors, leading to a type of social climbing. They don't want to offend the needs, values, and interests of an increasingly wealthier slice of society to maintain access to that social class and its money. "Don't bite the hand that feeds you."
High incomes also lead to a tendency to no longer live in the communities they serve, if they ever lived there in the first place. They become disconnected from the realities, values, and priorities of those they are supposed to be serving. What happens when the economic interests of the poor is in conflict with the economic interests of wealthy donors?
One might argue that this is the price we must pay and is a fair tradeoff for "professional" leadership. While there are certain plusses in having an educated, corporate-style leadership, it is not the only measure of value. Are we getting leadership that avoids taking on the tough issues, that avoids vigorously promoting the interests of poor people? Are we getting leadership that silences their voices and moderates their positions so they don't offend wealthy donors? Are creating a culture in which this corporate style of leadership leaves when revenue declines? In too many instances, the answer is yes.
What value do we place on loyalty, stability, and consistency, especially when times are tough? What value do we place on creating systems that allow us to be truthful, to not look the other way, to linking ourselves with the struggles of the poor and disenfranchised?
This system is not the fault of those in charge. There is a better way and those in charge have the power to make the change. The answer is to create alternatives to the current compensation model and expand the definition of success for executive directors.
My ideal is that leaders of nonprofits take an oath of poverty, live in the communities they serve, and consciously make themselves reliant on the same systems of care as the people they serve. However, every leader is not prepared to follow this model. There are alternative forms of nonprofit executive compensation in which all boats rise. Some of these models are already working at a variety of organizations and we should examine them for appropriateness for all city-funded agencies.
Tying executive compensation to a multiple of the lowest paid worker allows all boats to rise and will garner a broad base of popular support. Providing contract bonus points tied to the percent of total agency salaries dedicated to positions for people on disability will increase the visibility of the disabled as organizational assets. This moral imperative makes business sense and is achievable by San Franciscans.
Finally, there is the possibility of an absolute cap on nonprofit compensation. Such legislation is currently under review in Canada and New Jersey. Caps will remove the upward pressure on salaries, freeing up time and energy to focus on the mission. We are witnessing how tying executive compensation to increases in revenue leads to a loss of leadership when revenues decline. In some ways, capping compensation might smooth out the ups and downs of the business cycle and lead to greater stability.
Brian Basinger is the executive director of AIDS Housing Alliance/SF. At $690 per month, his salary is nowhere near six figures; AHA does receive funding from the city of San Francisco, and 67 percent of every dollar raised directly benefits people with HIV/AIDS, either in salaries or rental assistance.