Medical, science nonprofit leaders earn most
From The Oak Ridger
January 21, 2008
John Huotari
john.huotari@oakridger.com
EDITOR'S NOTE: This is the last of a three-part salary series focusing on directors of local nonprofit organizations. In Part Three, The Oak Ridger looks at the compensation paid to the leaders of seven organizations whose work is related to science, medicine, the environment, disaster relief, and to the missions of the U.S. Department of Energy.
A former top doctor at Methodist Medical Center of Oak Ridge was the highest-paid nonprofit executive in tax records recently reviewed by The Oak Ridger.
Tom Wallace, the hospital's former vice president and chief medical officer, collected $299,451 in compensation in calendar year 2006, according to records examined in a three-part salary series.
The second highest-paid local executive was Ron Townsend, president of Oak Ridge Associated Universities. He received $267,862 in the tax year ending Sept. 30, 2005, tax records show.
Wallace and Townsend's status as top earners mirrors a 2007 GuideStar Nonprofit Compensation Report. The report said health and science organizations offer the highest median salaries among nonprofits studied.
Food, religion and housing organizations pay the lowest, the report said.
During the last month, The Oak Ridger has reviewed tax records of a sampling of 24 local nonprofit organizations. In the first two parts of the series, the newspaper studied nonprofits who work on economic development or provide cultural and social services.
This third part focuses on nonprofit organizations whose work is related to science, medicine, the environment, disaster relief, and to U.S. Department of Energy missions.
In this final installment, the executives who trailed Wallace and Townsend in terms of pay were:
- Jan McNally, former president and chief administrative officer of Methodist Medical Center of Oak Ridge. She brought in $258,276 in calendar year 2006. She made about 86 percent as much as Wallace.
- Bob Benning, chief executive officer of Ridgeview Psychiatric Hospital and Center. He collected $143,498 in the fiscal year ending June 30, 2006.
- Susan Gawarecki, executive director of the Oak Ridge Reservation Local Oversight Committee. She said her current base salary is $77,133.
- Tony Farris, manager of the American Red Cross, Appalachian Chapter. He received $55,686 in compensation in calendar year 2006.
- Ralph Hutchison, coordinator of the Oak Ridge Environmental Peace Alliance. He earned $37,306 in the tax year ending June 30, 2006.
- Sandra Goss, executive director of Tennessee Citizens for Wilderness Planning. She took in $24,707 in calendar year 2006, although her job is not quite full-time.
Compensation figures can include more than salaries. For example, they might include travel allowances, bonuses, or other expenses or reimbursements.
Benning said his base salary was about $10,000 or so less than his total compensation.
Top pay?
Like McNally, Benning made less money than other top staff members.
In Benning's case, four Ridgeview staff members who are psychiatrists earned up to about $74,000 more per year than he did.
"They're really our highest compensated staff," Benning said. "It's representative of their advanced credentials and training."
The medical staff, he said, is ultimately responsible for Ridgeview's quality of care.
Benning said Ridgeview's top earner, Renu Bhateja, and others could earn a "heck of a lot more" if they went into the private sector. Bhateja, Ridgeview's medical staff president, received $217,370 in compensation in the fiscal year ending June 2006.
"Believe me, she could be pulling in double that amount if she were in private practice," Benning said. "She has extensive experience."
Other executives interviewed for this nonprofit series also said they or their staff members could make more money in the private sector. Many have advanced degrees in fields from medicine to geology to social work.
Still several said their nonprofit work is "a calling," and they enjoy their jobs.
"There's something satisfying about being able to provide care to a group of individuals who are very much in need," Benning said.
"If we weren't here, they wouldn't get that."
Salary surveys
Some leaders, like Benning, said their nonprofits compare local compensations to those offered by other similar organizations -- sometimes using salary surveys.
Those executives said their pay is probably mid-range.
Methodist Medical Center uses a nationally recognized consultant, Mercer Human Resources Consulting, to help set executive pay, said Crystal Jordan, the hospital's marketing and public relations manager.
"This company does analysis on executive compensation practices of health care systems of similar size, scope, and complexity," she said.
Farris, of the American Red Cross, said his salary is determined in consultation with an area office in Birmingham, Ala.
"Even though our board sets it, they still have to see if that's all right with the area office," he explained.
But a few executives said they don't pay close attention to what other nonprofit organizations are paying.
Hutchison, of the Oak Ridge Environmental Peace Alliance, said he has been chided for not having a sufficient salary.
Gawarecki, of the Local Oversight Committee, said her pay might be high in comparison to environmental organizations, but she said her job also requires a lot of technical knowledge and additional work on complex policy issues.
"For a nonprofit, I think it's right where it needs to be," Gawarecki said, referring to her salary.
Serial comparisons
The range of salaries in this third part of the series was greater than in the first two parts. And the top pay was higher.
The highest-paid executive in the first two parts was Tom Rogers, Technology 2020 president and chief executive officer. He received $252,587 in compensation in calendar year 2006, compared to $299,451 for Wallace, Methodist Medical Center's former top earner.
Rogers, whose base salary was lower than his compensation, said he has been offered more money to work elsewhere.
The Oak Ridger tried unsuccessfully to get comments from McNally, MMC's former president and chief administrative officer, and Mike Belbeck, who replaced McNally in 2007.
Hospital spokewoman Crystal Jordan said Wallace has moved out of the area, and Methodist Medical Center no longer has a vice president and chief medical officer.
In the first part of this series, The Oak Ridger reviewed executive compensations and other financial information at eight local nonprofit economic development organizations. The review found that half the leaders of those groups had compensations between about $100,000 and $130,000.
Meanwhile, heads of nine cultural and social service organizations had a median compensation close to $40,000, according to the second part of the series.
In all three parts, the lowest-paid executive was Nancy England, executive director of Music Arts Inc. England collected $9,000 in compensation in calendar year 2007.
"There just wasn't enough money in the kitty," she said, explaining that most student lesson fees go to instructors.
Frugal and charitable
Despite their relatively lower pay, leaders at some of the smaller nonprofits maintained good humor about their compensation.
"There are a lot of rewards besides the financial ones," said Goss, of Tennessee Citizens for Wilderness Planning.
Meanwhile, leaders who earned more often emphasized the potential for higher pay elsewhere or said their salaries were competitive.
Though The Oak Ridger just looked at what some leaders are paid, nonprofits also have board members and other leaders -- as well as volunteers -- who work for free, sometimes donating a dozen or more hours per week.
Nonprofit leaders point out areas where their organizations are frugal and charitable, whether in providing some reduced-fee or uncompensated care at Methodist Medical Center and Ridgeview or in using donated money only for scholarships at Music Arts.
'We're open here'
Executives had a range of reactions to the scrutiny of this series. One leader refused to discuss his compensation or other financial information, and a few others didn't return phone calls or e-mail messages seeking comment.
Still, representatives of most organizations provided the information requested -- or said they would try to.
"I will be glad to provide the information you need; I just don't know if I can get to it today," ORAU's Townsend said in a Friday e-mail. "I have been covered up with back-to-back commitments."
A few nonprofit leaders welcomed questions.
"My salary is public knowledge," said Gawarecki, of the LOC. "We're open here."
The returns of tax-exempt organizations, known as Internal Revenue Service Form 990s, are open to public inspection.
Farris, of the Red Cross, echoed Gawarecki's comments.
"We pride ourselves on being open," he said. "We feel like we're good stewards."
In fact, the local Red Cross chapter was recognized as a "Top 10" chapter in the United States in 2005, he said.
The Oak Ridger asked nonprofit leaders why they stay at their jobs, given that they might be able to make more money elsewhere.
England might have summed it up best.
"Money obviously doesn't keep me at this job," she wrote in a letter to The Oak Ridger.
"It's the privilege of working with some fine people, the frequent compliments ... and the knowledge that this is a worthwhile contribution to our community."
John Huotari can be contacted at (865) 220-5533.
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