COVID-19: Nonprofits struggle financially, their top executives earn big

While many nonprofits were struggling, there were those with top execs earning high salaries, and that’s in addition to the tens of millions of shekels they have in cash reserves.

Illustrative photo of Israeli money (photo credit: MARC ISRAEL SELLEM)
Illustrative photo of Israeli money
(photo credit: MARC ISRAEL SELLEM)

I recently posted my annual review of nonprofit salaries in Israel on social media. I focus on many organizations where the top salary earners are being paid NIS 30,000 a month or higher (and while that translates to about $120,000 US annually, I really don’t want to compare to US salaries and US nonprofits, since there are too many factors involved to make it a fair comparison).

My purpose in posting these facts is to make people aware of one important aspect regarding choosing where to give their precious and hard-earned tzedakah shekels.

Before I delve into the issue of salaries, let me make a few general points, based on my 25 years of experience in the field in Israel.

JEWS GIVE tzedakah because it is a mitzvah – a commandment – to give. Rambam (Maimonides, 12th century) writes in his introduction to the laws of tzedakah (“Gifts to Poor People” 10:1), “We must be especially careful to observe the mitzvah of tzedakah, more so than any other positive mitzvah.” Let me repeat that last part: “more so than any other positive mitzvah.” According to the Rambam, you need to be more careful about giving tzedakah than about any other positive mitzvah, such as loving God, sanctifying the Shabbat, putting on tefillin, affixing a mezuzah, eating matzah, hearing the shofar, honoring parents, and so on.

Rambam – a physician, philosopher and astronomer, and one of the greatest rabbinic minds in our history – understood that people would be more likely to be extremely scrupulous about the matzah they eat or about their Shabbat observance than about giving tzedakah properly, so he made a point to clarify where the priority ought to be.

 THE WRITER’S blue box, the iconic KKL-JNF ‘pushke’ raising money for the Zionist dream. (credit: COURTESY AVIE GEFFEN) THE WRITER’S blue box, the iconic KKL-JNF ‘pushke’ raising money for the Zionist dream. (credit: COURTESY AVIE GEFFEN)

And the great rabbinic leader of the previous generation, Rabbi Joseph B. Soloveitchik, felt that the mitzvah of giving tzedakah is one of only two mitzvot where being “mahmir” (more stringent than necessary) is “highly advisable” (as quoted in Rabbi Aaron Adler’s book Seventy Conversations in Transit, OU Press, Urim Publishers, 2021, p.157).

One thing we must understand: tzedakah money doesn’t actually belong to us – it always belongs to the recipient. We are only the trustees, holding the funds in trust until distributed. We are trusted to give tzedakah in the most efficient and effective manner possible. Otherwise, we are misusing tzedakah funds which belong to someone else!

My “tzedakah rebbe,” Danny Siegel, taught me about the verse “Do not steal from a poor person, because s/he is poor” (Proverbs 22:22). The rabbis ask a very appropriate question (Numbers Rabbah 5:2): “What can this possibly mean? If one is poor, what is there to steal?”

They answer, explaining that poor people have God-given rights – the right to the benefits from certain Torah mitzvot like the gleaning of the fields and other tzedakah-related commandments. If we don’t provide what we are obligated to give to the poor person, in essence, we are stealing from them. The rabbis challenge: “Isn’t it enough that they are poor and live in misery while the rich are living comfortably, but you would also dare steal from them what God has given to them?”

AND THAT – “while the rich are living comfortably” – brings us to the question of appropriate salaries in the nonprofit sector.

I am aware of many of the arguments for paying high salaries, including the most common one: “You have to in order to attract the best and the brightest.”

By saying that, you are insulting every nonprofit CEO who earns a reasonable salary, since it is simply not true. There are hundreds of nonprofits being run by “the best and brightest” who are earning reasonable salaries.

You simply cannot compare the nonprofit sector to the for-profit business sector, where the bottom line is money. Not to mention, when is the last time you made a donation to a business? In nonprofits, money is only the means to achieve the goals of making society better, and the work is often more meaningful and rewarding. And since there are hundreds of nonprofits doing equally good work with reasonable salaries, I choose to support those. In fact, I would rather see teachers and social workers earning better salaries!

In the list I posted, there are executive salaries that rose as much as 25% for the first year of COVID (data reported were until December 2020). And in 2021, while many nonprofits were struggling, there were those with top execs earning high salaries, and that’s in addition to the tens of millions of shekels they have in cash reserves. When I inquire about that, I am told, “It’s for a rainy day.” Guess what? It’s raining! In fact, with COVID, it is a two-year downpour with no good ending in sight.

Before you contribute, check carefully – ask what the top execs are earning, ask what the cash reserves are. Make the Rambam proud!

The writer is a philanthropic consultant helping people and foundations give their tzedakah money away wisely, efficiently and effectively for over 25 years. In addition, he consults to hi-tech start-ups, and is an expert in social media marketing and promotion. He can be reached at: [email protected]