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Cuomo Will Probe Executive Salaries at Taxpayer-Funded Nonprofits

Gov. Andrew Cuomo announced a new task force will audit nonprofit groups that receive state funds. The news followed a New York Times piece that found nine nonprofit executives who make more than $500,000 per year.

As part of a larger bid to rein in New York's spending and root out inefficiencies at every level of government, Gov. Andrew Cuomo has zeroed in on the salaries and benefits of state workers, teachers, school superintendents and judges, winning historic accords from the state's largest public-sector unions along the way.

Now the freshman is turning his focus to executives at nonprofit groups funded by taxpayer dollars, almost 2,000 of whom are making six-figure salaries. Critics, including Cuomo, say nonprofits have a particular responsibility to make sacrifices for the people they serve.

"Executives at these not-for-profits should be using the taxpayer dollars they receive to help New Yorkers, not to line their own pockets," Cuomo said in a statement.

A New York Times article that ran the day before Cuomo's announcement revealed that the CEO and president of the Young Adult Institute, which provides a range of services to disabled people in New York City, Long Island and Westchester, were both earning around $1 million per year in pay and benefits before they abruptly resigned in June. They also billed YAI for their kids' college tuition and, in CEO Philip Levy's case, payments on his daughter's Greenwich Village co-op.

Seven other nonprofit executives earn more than $500,000 per year, according to the Times. Cuomo's office says approximately 1,926 executives make six-figure salaries, with the average pay for that group at $168,555 per year.

Eyeing salaries at nonprofit groups is nothing new. Last year, New Jersey Gov. Chris Christie imposed a cap of $141,000 on executive pay at social-service organizations.

Advocacy groups and nonprofit executives, while acknowleding that the high salaries noted by the Times are excessive, say they've been unfairly targeted because of a few bad apples.

"Our employees' salaries are modest and they carry significant amounts of work responsibilities in addition to the federal, state, local and internal evaluations they must do," Susan Wayne, the president and CEO of Family Services of Westchester, said in a statement.

Wayne added that her group, which provides counseling to people with mental and emotional problems, is already required to have licenses from seven separate state agencies and be accredited by the Better Business Bureau.

Doug Sauer, the head of the New York Council of Nonprofits, said groups are already properly regulated by IRS rules that require nonprofit CEOs to receive 'reasonable compensation,' which is largely based on pay practices at comparable organizations.

"The vast majority of community-based nonprofit employees are doing hard and challenging work at compensation levels that are far below public employees and often the for-profit sector," he said.

Cuomo, who was on vacation last week, did not provide a timeline for the task force's work. He did announce that Ben Lawsky, his former chief of staff and the head of the newly-formed Department of Financial Services, will chair the panel.

Greg Tart August 22, 2011 at 05:40 AM
Cuomo is on a collision course with our fighting attorney general "Hit and Run Schneiderman" who wants to streamline regulation for non profits; a true creature of the upper west side Schneiderman sees non profits as our second largest "business"; one of honest erics biggest supporters was the head of NARAL who used the position to pay her living expenses when she wasn' writing checks out to the elect Schneiderman
Francis T McVetty August 26, 2011 at 06:25 PM
Doing business as usual. Things will remain the same. When it hurts the politicians pocket book you know nothing will be done.

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