However, in this blog I would like to hone in on another central point of the book where we disagree. As my friend, who agrees with the author on this matter, summarized the point to me -
... taken as a whole, his book sets forth the argument that doing good in the world is not always best served by “sacrifice”... It is this belief that sacrifice equals doing good that creates the mindset that great for-profits might invest heavily in great people, great technology, great infrastructure, but that great nonprofits should do the reverse and keep costs low.One core focus in the book regarding "investing heavily" revolves around CEO compensation. It is argued that there should be no set upper limit on CEO salaries provided that they provide good outcomes. As I read his argument for this, I kept thinking of a line from an old Jethro Tull song, "I don't believe you, you've got the whole damn thing all wrong..."
To begin with, I refer my readers to the last two blog entries written here - Ten Ebeneezer Charities and Tales of the Dark Side. I believe these entries help chronicle one of the sad stories within the charity world -the tendency of some of those at the top to abuse their power and influence for their own self-interest. The idea of further freeing them to make more money scares me to death. I know that the author says this would not be done willy nilly and would be based on performance, but I have lived and breathed this stuff long enough to know that it would not work that way. If we were to allow charity CEO's to get even higher paying salaries, I believe the abuse of power would only increase. The theoretical argument is nice, but reality tells a very different story.
I understand that Mr. Pallotta believes that, since in his case he was not a thief like those we described in the earlier blogs, he should not be penalized. However, it gets to the core question of why people do this work. I do not see it as a sacrifice to get a salary that pays less than in the for profit sector. If that is what I wanted, I would've have chosen a different career path. I believe that people who do this work for the long term see it as an honor, a privilege and a great blessing to be able to dedicate their lives to doing good work. Money is nice, but there are plenty of other things that can give one satisfaction.
Furthermore, Pallotta assumes that the best and the brightest will avoid the field because we don't pay the same as for profits. My first reaction is, "What am I, chopped liver?" My second reaction is, even if I am chopped liver, I am continually impressed by the intelligence and competency of many of the people who do this work. In addition, if anything, I have seen more people leave for profits to enter the charity sector than the other way around. My next reaction is that, I think Pallotta is wrong when it comes to the specific point of CEO salaries - the average charity CEO makes $150,000 in this country. That's plenty. Finally, even if Pallotta was correct (which he isn't), his recommendation has as much chance of success as pigs learning to fly. Just check out the most frequent donor comments on any charity we review. It's all about CEO salaries already being too high!
Having said all that, I do agree with Pallotta when it comes to front line staff (see my blog entry with Kaitlin Woolf - The Front Line vs. The Bottom Line). When compared with comparable positions within government, front line workers in the charitable sector make about 47% less (interestingly enough, I believe charity CEO's make as much as or more than their governmental peers). Of course Pallotta's solution is better salaries. I agree, but again probably not as much as he would recommend! It just isn't realistic or necessary. A decent living wage is important, but comparability with for profit salaries is excessive. Further, it is not the only option. I concluded our blog entry this way-
... I believe the most important thing a charity has to offer is its mission... If ... staff has a sense of the important role they play in achieving the mission, we have a leg up over the competition from the other sectors. In addition, I have emphasized in another blog the importance of having core values that are truly embraced by the agency from top to bottom, which nurture staff and clients. Having a dynamic, transparent, creative, inclusive, team culture is a rare commodity that will help with staff retention even when the offers of higher pay come along.In summary, my answer to the question - Is it a sacrifice to work in the charity sector? is that, if you are doing the work for the right reasons and the agency has the right culture, it isn't a sacrifice at all. It is a gift.