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Agencies' salaries comparable to private sector

April 22, 1997

By LAURA ERNDE

Staff Writer

Before Fred Otto was hired as executive director of the Commission on Aging in 1990, salaries at the nonprofit organization were "miserable," says John Kenney, who was on the board of directors then.

It took a salary study to bring the pay scale in line with county government, he said.

For the most part, salaries of nonprofit executive directors in the county are comparable to national salaries. Most nonprofit agencies say they are able to pay enough to attract qualified people.

Most nonprofit leaders could get paid more if they worked in the private sector, said Al Martin, president of the board of directors for United Way of Washington County.

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"Many times people are willing to work and perform a service even though they would command a greater salary in the private sector," Martin said. "There's this wonderful sense of community, a belief in the organization and its mission. People feel good about what they're doing."

Like the chief executive officer of a for-profit corporation, nonprofit executive directors need to have financial and management skills, he said.

United Way Executive Director Kathleen Vogt helped raise $1.6 million for 24 member agencies last year, he said. Her 1995 salary was $46,300.

The executive director at Hagerstown Goodwill Industries pulled down a $84,501 salary in 1995. The four-state agency is the 16th largest employer in Washington County and has an annual budget of $6.7 million.

Organizations like the YMCA and Western Maryland Child Care Resource Center also pay more than $50,000 a year.

That compares to the median household income for Washington County in 1993, which was $32,059.

Salaries need to be high enough to attract good, qualified people, said Richard Moyers, spokesman for the National Center for Nonprofit Boards.

"Boards need to be realistic about what a professional needs to live on. You're talking people who have families, who have kids who need to go to college," he said. "What you see more often is organizations that are struggling to compensate their executives enough."

Arts organizations traditionally pay the lowest salaries, he said.

Hospitals, scientific research organizations and trade associations pay better than typical charities, he said.

Public perception is another factor in setting the executive director's salary, especially if the organization gets a lot of public support, Martin said.

"It's kind of a balancing act," Kenney said.

After the Commission on Aging salary study recommended an executive director salary of between $28,104 and $40,698, Otto, who had recently retired from Hagerstown Junior College, was hired for somewhere near the middle of that scale, Kenney said.

But that wasn't high enough for some candidates. One man asked for $60,000 a year and withdrew his application when he learned the salary range, he said.

"He was well out of the ballpark and we quickly told him so," Kenney said.

Some nonprofits, like the YMCA and Boy Scouts, follow salary guidelines of their national organizations. There is a range so local boards can make adjustments for merit, years of experience and an area's cost of living.

Executive directors often come from within the national organization. Mark Tyson, executive of the Mason-Dixon Boy Scout Council, came from a council in Indiana.

"We've been able to recruit good people. We've been able to promote good people. If they're good, you know you're going to lose them," said Council President Jerry Hoak.

Other agency salaries are closely tied to how well the organization's fund-raising effort is doing.

The executive director of the Parent-Child Center in Hagerstown is reviewed annually, said Board President Stephanie Bock.

"All of it is based on our financial condition at the time," Bock said. If the budget is in good shape, the executive director gets a raise.

"Part of the job is raising money," she said.

There is a wide range in nonprofit salaries, depending largely on each organization's size and scope.

At least two county positions paid less than $25,000 a year in 1995. Both were part time. Bob McKee, executive director of Big Brothers/Big Sisters had his salary cut after he was elected to the Maryland House of Delegates in 1994.

The Salvation Army's Maj. Samuel VanDenburg, at $26,500, is one of the lower paid directors. But his compensation includes a house and a car.

Of the local salaries surveyed, more than half were in the $25,000 to $50,000 range.

That range falls close to national averages, according to a recent survey by the National Center for Nonprofit Boards. The survey showed that:

- 5 percent of nonprofits pay less than $25,000 a year.

- 41 percent pay $25,000 to $50,000.

- 35 percent pay $50,000 to $75,000.

- 13 percent pay $75,000 to $100,000.

- 6 percent pay over $100,000.

The local salary list is not comprehensive. Information came from 1995 tax records filed with the Washington County Gaming Commission and an informal survey of United Way agencies.

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