Kevin Winge, the new executive director at Project Open Hand, deserves kudos for the forthright way in which he explained the agency's budget deficit. Last week, his office called and Winge came down to this newspaper to meet with the editorial staff. He reviewed the situation and the decision to address it that was agreed upon by him and the board. In order to reduce a $728,000 deficit, Open Hand immediately eliminated four staff positions (two at the director level). Also, starting July 1, most of the agency's clients living with HIV will have to choose between receiving home delivered meals or picking up groceries and preparing the food themselves. Currently, people living with HIV can choose both services. Other clients that Open Hand serves – those living with breast cancer, the homebound critically ill, and seniors – have always had to make this choice.
Winge told us that meetings are planned with clients, volunteers, and donors and that letters to the clients were sent last week. Compared to the way other HIV/AIDS nonprofits have broken bad news (by circling the wagons, not informing clients, and not talking to the press) Winge's approach was refreshing and, we believe, much appreciated by the agency's clients. It's a relief, for example, that Open Hand isn't shutting down its Alameda County facility, as those clients are sorely in need of its food and nutrition programs.
But upon further consideration of Open Hand's plight, and being aware of its long history, we are disappointed that Winge himself isn't sharing in the pain by taking a salary reduction. We discussed the issue with Winge when he came to see us, and as we reported in last week's story, Winge said he had considered it. But in the end, he said, he needed to do something "bigger and deeper."
Yet when the cuts Open Hand announced are added up, the deficit is nearly closed. The personnel cuts add up to approximately $350,000, while the changes to the food program save an estimated $300,000. Open Hand will see another $40,000 in savings by scrapping its peanut butter program. That leaves about $38,000 to trim from the agency or the executive director's salary.
At $200,000, Winge's salary is near the top end for leaders of local HIV/AIDS service organizations. For example, the CEO of the San Francisco AIDS Foundation makes $249,000, but that agency's budget, at $24 million, is more than twice that of Open Hand, which has a budget of $9.8 million. In other words, SFAF's CEO salary represents 1.03 percent of that agency's budget, while Winge's represents about 2.04 percent of Open Hand's. One could argue that both agencies pay their leaders too much, and we have opined on nonprofit executive salaries over the years as being too high at the expense of client services. When an agency actually has to cut client services, as Open Hand announced, it seems to us that it's fair to examine the issue of executive compensation.
Open Hand, unlike many local HIV/AIDS nonprofits, also has a history of trimming executive salaries. Back in the late 1990s, Open Hand's board voted to cap the agency's top six salaries. Back then, the agency's budget was $6.8 million and then-Executive Director Tom Nolan's salary was $84,684.
More recently, when Nolan departed from Open Hand in January, he declined a $20,000 bonus and asked the board to rescind it. Given that the agency was looking at a deficit, and Nolan's own feeling that the sum might seem "exorbitant," as he told us, that was the right call.
We know that Winge just started at the agency, after moving from Minnesota. We also understand that he accepted the position at the salary offered by the board, and yet not even six months in, the agency is facing a deep deficit, which he was aware of.
Taking a salary cut would help to level the playing field for Open Hand's staff and clients. Such action would also give Winge instant credibility as he starts hosting the meetings. He can look clients, volunteers, and donors squarely in the eye and be able to say, "I'm in this with you" or "I, too, am making a sacrifice."
Serving clients should be the top priority of any nonprofit, but especially those dealing with health issues. Taking a salary cut would go a long way to ensuring that clients at Open Hand face minimal changes in service.