Nonprofits’ salary decisions questioned

Nonprofits operating in San Francisco that receive significant funding from The City have employees on the payroll taking home six-figure salaries, according to an Examiner review of tax forms and city data.

Nearly 60 of the more than 100 nonprofits that are each slated to receive at least $1 million in city funding this year have paid top executives more than $100,000 per year in salary, and 12 have paid high-ranking employees more than $200,000.

In total, San Francisco has doled out more than $587 million in federal, state and city dollars to nonprofits this fiscal year, which ends on June 30. This is up from the $457 million spent last year, according to the City Controller’s Office.

Many of the tax-exempt organizations serve San Francisco’s poorest residents to fulfill a variety of needs The City contracts them to do, including homeless outreach, medical care, job support, children services, food and drug treatment.

Some of these agencies are paying sizeable salaries to their top employees. Tom Nolan, the executive director at Project Open Hand, which provides meals to the homebound and critically ill, took in $184,000 in 2006. John Eckstrom, the CEO of the Haight Ashbury Free Clinics earned $160,000that same year, according to the nonprofit’s tax records. Randy Shaw, who heads up the Tenderloin Housing Clinic, was paid $104,757.

Other nonprofits support performing arts or museums, hospitals or other health facilities, or other institutions, and are not exclusively focused on serving low-income populations.

With San Francisco facing a projected $338 million budget deficit for the next fiscal year, city officials have been closely examining city spending, including the taxpayer dollars it gives to nonprofits.

The City Controller’s Office, at the request of Supervisor Jake McGoldrick, is investigating nonprofits that receive most of their funding from The City to determine how many of their employees earn more than $100,000.

The report may be released as early as this week, according to Deputy City Controller Monique Zmuda, who said nonprofits that receive 50 percent of their funding from The City are being asked to report salaries.

The City could use its contracts with the nonprofits as leverage to stipulate salary levels, if city officials believed such a measure was necessary, she said. The funds The City allocates to nonprofits, even if they come through federal or state dollars provided to San Francisco, could be used in other ways, she said.

Additionally, one of the unions that represent city employees — the San Francisco Building and Construction Trades Council — sent a letter to Mayor Gavin Newsom in April that questioned whyThe City was asking labor to make 3 percent cuts in light of the budget shortfall, but nonprofits with city contracts weren’t being asked to make similar concessions.

Watchdog group Charity Navigator said it has reviewed San Francisco’s nonprofits and found that “charity CEOs in San Francisco consistently earn less than those in most other cities.”

The median level of compensation for a nonprofit leader in San Francisco — $111,754 — is among the 10 lowest, even falling below the national median of $114,038, according to Charity Navigator.

Nonetheless, McGoldrick, who is the chair of the board’s Budget and Finance Committee said he was uneasy about such high wages for “public service” positions.

“The goal of making excessive executive-type salaries doesn’t belong in the nonprofit sector,” McGoldrick said.

Top heads earn top dollar

More than 10 of the nonprofits receiving $1 million or more of city funding have chief executives making $200,000 or more a year, according to 2005-06 tax forms.

At the top of the list with $503,959 was John Marks, the former president/CEO of the San Francisco Convention & Visitors Bureau, according to forms filed for the 2005-06 fiscal year.

The Jewish Family and Children’s Services compensated Executive Director Anita Friedman with $417,254, according to the 2006 data.

The Family Service Agency of San Francisco paid President/CEO Robert Bennett $178,808.

Agency official Greg McCombs defended the payroll, saying that “it’s right at the level for most nonprofits that have a $12 million budget.”

The Boys & Girls Club of San Francisco reported paying President Rob Connolly $191,138. The nonprofit’s spokeswoman, Denise Cante, contested the reported salary, saying he has been paid $151,230 since 2003. The salary is fair compensation for managing an $8.9 million budget, she added.

The Edgewood Center for Children and Families reported that CEONancy Rubin was given $232,601 in compensation.

jsabatini@sfexaminer.com

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