Michelle Nunn, nonprofit profiteer
Usually, the left is quick to denounce CEOs who pull off a merger, and then cut more than half of their employees while doubling their own salaries. But I am waiting for MSNBC and the New York Times to work up some outrage over Michelle Nunn, who pulled off that trick in the nonprofit sector, and who ios now running for the Senate in Georgia as a Democrat.
“They came to do good, and ended up doing very well, indeed.” The old quip about the missionaries who came to Hawaii and whose families ended up owning vast swaths of land seems to apply to Ms. Nunn. Jim Geraghty of National Review did the research on the IRS reports (form 990) of her nonprofit organization, Hands on Network. He cites her campaign’s description of the evolution of her nonprofit career:
Seeing a need in Atlanta for a vehicle by which young people could engage in service to solve problems in their own communities, Michelle and a group of friends got together to create Hands On Atlanta, with Michelle as its first Executive Director. Over the next decade, Michelle grew volunteerism across Georgia, and eventually throughout the country, through Hands On Network, a national outreach of volunteer-service organizations. Michelle was selected for a three year Kellogg Foundation Fellowship that gave her an opportunity to travel the globe and work with civic and religious leaders to help them translate the common ground of their faith and ideals into building better, more productive communities and services.
In 2007, Hands On Network merged with the Points of Light Foundation, President George H. W. Bush’s organization and legacy. After leading a successful merger, Michelle became the CEO and President of Points of Light, now the largest organization in the country devoted to volunteer service.
Wow, what a gal! So selfless, so firmly committed to helping others, to doing good. Why her compassion is simply inspiring, isn’t it? It is, until you look a little closer, as Geraghty did:
When Nunn was running Hands on Network, she was making $120,000 – a lot of money to most folks, but not that much more than the average of a CEO or executive director of a nonprofit in the Southeast. (In 2012, the average was $111,693.)
Except that when Hands On Network and Points of Light Foundation merged, they eliminated a lot of jobs. A lot. From 2007 to 2010, the staff dropped from 175 to 80 employees. By itself, that would hardly be a scandal; when two nonprofits merge, there are often a lot of duplicative positions and inevitably, some people get let go. The economy took a severe tumble during those years, of course, and so it’s reasonable to conclude the hard times hit the nonprofit as well.
It’s just that after the merger . . . Nunn’s salary went up. A lot.
In 2008, Nunn received $250,000 as CEO of the Points of Light Foundation, according to the organization’s Form 990.
In 2011, Nunn received $322,056 in total compensation, with a base compensation of $285,533 as CEO of Points Of Light Foundation, according to the Form 990.
I am sure many voters in Georgia will find this history enlightening. I look forward to Ms. Nunn explaining the fiscal woes that forced layoffs but were no obstacle to her cashing in, personally.
I can remember the exact moment I became a cynic about nonprofit organizations. It was in my second year at Harvard Business School, during recruiting season. A classmate and I were discussing where we were scouting jobs, and he patiently explained to me the great advantages of going to work for a major nonprofit. The satisfaction of serving the commonweal was not on his list, but the advantages of not having your “surplus” (please, never call it “profit”) taxed, and the need to keep those surpluses low by spending money on salaries, benefits, lavish offices, and undemanding work schedules did make the list. Nonprofit bureaucracies that enjoy a solid brand name and source of income, like their government bureaucrat counterparts, almost inevitably turn toward feathering their own nests.
Subsequently, in my consulting career, I had the opportunity to look inside a few large and prosperous nonprofits. My classmate’s observations proved to be true.
To be sure, there are many genuinely saintly people working hard for little or no pay in the nonprofit sector. You can tell who they are by looking at the forms 990 and checking total compensation of the executives.