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Yea. Presidents of universities are the worst.
Any institution pays its top people enough to attract qualified people to do the jobs they set forth. A non-profit enjoys no particular reason not to pay such people. One would think that they would, by virtue of their often lofty social goals and values, set out to attract some of the very best people to operate their missions and see them executed effectively and to attract others to their cause as a result.
I don't see how that should exclude paying people well to do it.
Agreed. They're basically paid to fund raise (either by lobbying from the government or from donors). The fact that we give any institution tax free status gives them special privileges and because the individual people working for them aren't non-profit, they can just unfairly compete and their top employees can make money off of the supposed "public service" that their institution provides.
I completely disagree with you here. See my response to Jared above.
What exactly is it that for-profit corporations are doing differently? Other than tax-exempt status? Are they also not lobbying and "fund raising" through their operations?
I might see a reason to revoke the tax exemption in your logic, but I don't see a reason that non-profits shouldn't pay for good people to operate them.
I'm saying that if we're going to make the argument that the market should set wages (which I support) then it's wrong to give some organizations an edge by giving them tax exempt status. Presidents of non profits are paid more than they would otherwise be able to be if competition were fair, therefore they are being paid too much.
So the implication is a testable one. Are the presidents of non-profits paid more than the presidents of for-profit companies?
Based on a quick check on payscale.com, the rate of the average CEO is 60k to 290k, plus bonus and profit shares. Non profit rates are 45k to 170k, plus bonus. So I'm guessing the answer is usually no.
We have to compare equivalent markets. Now what is a market where there are both non profit and for profit major players? … What about Jared's example of university presidents? here:
http://images.businessweek.com/ss/09/02/0216_coll…
http://www.bloomberg.com/news/2010-11-10/executiv…
It would appear that I'm entirely wrong about this.
The data looks mixed actually (private universities pay more than public for example, but both are usually non-profit), so I'd give you partial credit for the idea. But yes, for profit corporations will tend to pay more, mostly because they are usually bigger and have less overhead. There's often plenty of waste in a non-profit titularly performing some vital public service.
But I'd say usually the waste for a non-profit is not in CEO pay. It's usually in things like infrastructural costs (stadiums and adding new buildings are not cheap), and the higher costs for hiring people to meet with governmental requirements for otherwise mundane duties like janitors and secretaries.
There are also some basic requirements for a non-profit CEO to have "a reasonable salary". Whatever that means, it appears to put some modest caps on what is earned relative to what a private sector CEO might be able to earn.