Goodwill CEO R. Lee Waits' compensation is excessive for the head of a charity, which the donating public expects to funnel more money to clients.
A Times Editorial
Published August 16, 2005
For Goodwill Industries to help disabled people earn their own living, it relies first on the charity of those who donate their used goods to be resold. No matter how much the Suncoast organization likens its operations to a for-profit retail business, then, it is not the same. That's why the $530,693 compensation for Goodwill CEO R. Lee Waits in 2003 is simply out of place.
Goodwill-Suncoast and Waits can proudly point to a record of outstanding service in their 10 Central Florida counties. Last year alone, they helped 8,213 get jobs and provided services to another 34,688. But those good works are what separate Goodwill and Hospice of the Florida Suncoast and Coordinated Child Care of Pinellas, to name three nonprofits in the region, from a business world governed by the bottom line.
In setting Waits' base salary of $302,974 in 2003 and establishing an annual pension rate as high as 70 percent of pay, the Goodwill board relied on a survey of mostly publicly traded, for-profit companies. But charities are inherently different. That is why the federal government does not tax them and so many people freely donate to them. Charities are expected to be more frugal and to funnel their money into doing good, not doing well.
Coordinated Child Care is a good example. Its annual revenue in 2003 was $41.9-million - which was $7.1-million higher than Goodwill-Suncoast - but it paid its executive director Guy Cooley a total of $110,583. Says Cooley, who has spurned salary surveys that might lead to an increase in his pay: "It just seemed like when you are working with economically disadvantaged folks, you want to get as much money out to the clients."
Goodwill is not alone in ratcheting up the salary of its chief executive. Nonprofits throughout the nation, influenced by the greed that has swept through corporate board rooms in the past two decades, have responded in many cases by trying to keep pace. But that's a trap for charities, as the United Way of America discovered more than a decade ago. Public disgust over the financial excesses of former United Way executive William Aramony led to a drop in donations and an internal investigation that called the episode "a story of values lost."
None of the executive pay packages for Tampa Bay region charities compares with Aramony, but the lesson about values should not be lost.