Full Measure: Charity and Excess

Cropped Photo: / Creative Commons Attribution 2.0 Generic MGN Online

There are more than 1.5 million nonprofits or public charities in the U.S. In 2013, they reported a collective $1.74 trillion in revenue and $3 trillion dollars in assets.

But they don't have to pay normal taxes. The IRS exempts them because of the public good they do. But for some nonprofits, it appears charity begins at home, with big executive salaries that seem to belie the altruistic nature of their mission.

In 2012, Roger Goodell earned a handsome $44 million as commissioner of what was one of the most unlikely nonprofits around.

Congressman Jason Chaffetz (R- Utah) heads the House Oversight Committee. He says the IRS exempts the nation's 1.5 million nonprofits from income taxes because of their philanthropic missions. Not to pad executives' fat salaries.

Rep. Jason Chaffetz: It was almost laughable that the NFL was structured, its corporate offices as a not for profit organization.

Sharyl: Why do you think these groups that want to pay executives so much, or feel that they need to, structure themselves as non-profits?

Chaffetz: It can save them millions. Untold millions of dollars are saved and not paid into the federal Treasury by structuring as a not for profit organization. But I think a lot of people would be surprised by how much money the executives are bringing home putting in their own pocket.

Experts estimate the NFL's nonprofit status cost taxpayers over $15 million in lost tax revenue its most recent tax filing year, $100 million in the past decade.

Chaffetz raised the issue of exorbitant nonprofit salaries last September at a fiery hearing into controversies over Planned Parenthood: a nonprofit women's health and abortion provider. Cecile Richards is the group's president.

Rep. Chaffetz and Planned Parenthood CEO Cecile Richards (Sept. 29, 2015):

Chaffetz: In 2013, your compensation went up some $240,000. Your compensation baseline we're showing based on tax returns is $590,000. Correct?

Richards: That's not my annual compensation. Actually, my annual compensation is $520,000 a year.

It's not just Planned Parenthood and the NFL. There are eyebrow-raising salaries in nearly every sector of the nonprofit universe.

The Humane Society's CEO Wayne Pacelle can "put on the dog" with income upwards of $400,000 in 2013.

American Civil Liberties Union CEO Anthony Romero earned a very civilized $497,000 in 2013.

Franklin Graham, CEO of the Christian aid group Samaritan's Purse and son of evangelist preacher Billy Graham, received a divine $880,000 for his wallet in 2013.

In 2012, Goodwill's then-president John Miller pulled in a bountiful $3.5 million, counting his deferred compensation.

And in higher education, U.S. public college presidents averaged salaries of $428,000 in 2014.

Sharyl: What about public universities and colleges? Are there similar concerns with those?

Chaffetz: When the American taxpayers are having to subsidize and fund these organizations, at the same time parents are struggling, myself included, I've got two in college, to pay these high tuition rates, why should the university president be making millions of dollars?

In a class of his own: Ohio State University outgoing President Gordon Gee, who chalked up six million dollars in compensation in 2013, the year he departed.

When it comes to health care nonprofits: Kaiser Health Plan has 20 executives who make over a million dollars. Chairman George Halvorson took in a healthy $10 million in 2013.

And half the Obamacare nonprofit co-op insurers, including the Louisiana Health Cooperative, are going belly up, but their executive salaries are far from anemic. The Louisiana co-op managed to find $1.3 million for interim CEO Terry Shilling in 2013.

Various nonprofits have argued they must pay big salaries to "attract top-notch talent" to "stay profitable" and "preserve management stability."

Nonprofit Quarterly says salaries less than average might leave an organization "concerned about attracting and retaining the highly skilled and motivated staff members needed to achieve the goals."

But Chaffetz argues there's no bigger job than managing the country. So he has a bold new idea: nonprofit executives shouldn't have a bigger salary than the President of the United States: $400,000 a year.

Sharyl: What if they say we're gonna get far less talent if we start limiting our salaries?

Chaffetz: If you can be the President of the United States, managing a $3.9 trillion budget and all the headaches that goes with it, for $400,000 a year, so can the not for profit organizations.

At that Planned Parenthood hearing, Democrat Elijah Cummings (Maryland) said for profit companies also get tax breaks, even those convicted of crimes, and called Republican criticism of nonprofits hypocritical.

Rep. Elijah Cummings: These are huge companies that are actually guilty of breaking the law and their CEOs make millions of dollars! Republicans never criticize the salaries of their CEOs! Republicans targeted Planned Parenthood which provides essential high quality care to millions of American women more aggressively than all these companies combined!

But there's at least one case of outrageous pay where many Democrats and Republicans see eye to eye: the mortgage loan firms Fannie Mae and Freddie Mac. In July, Mel Watt, who heads the federal agency overseeing them, approved a scandalous hike for Fannie Mae CEO Timothy Mayopoulos and Freddie Mac CEO Donald Layton. They were making $600,000 apiece. Their raise? 650% to $4 million each. Congress moved quickly to block the increase.

Chaffetz: If you want to change your structure and be a for profit organization, make all you want. I'm not trying to dictate this. I'm just saying if you're taking the advantage of the subsidy that comes from being a not for profit, then you're not necessarily going to bring home a seven figure paycheck.

Tired of all the criticism, the NFL gave up its nonprofit status last April after 73 years. They'll lose millions in tax benefits. But they won't have to publicly disclose Goodell's big salary, anymore.

The week of Thanksgiving, President Obama signed the bill into law suspending the controversial compensation packages for nonprofits Fannie Mae and Freddie Mac. Those CEO's are rolled back to $600,000 a year. That's still $200,000 a year more than the President makes.

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