About once a year I ruin my day by looking up the salaries of the heads of charities, with Charity Navigator. It was cold comfort that the CEO of Compassion International, which we support, makes just $289,370 per year, compared to the World Vision‘s CEO’s ostentatious salary of $405,975.
It is important to recognize the argument that what matters is not overhead cost, but effectiveness. Now it’s for that very reason that I don’t get worked up over CEO compensation. I don’t know what it was about Steve Jobs that made Apple want to pay him billions of dollars every year, but it’s their money and their judgment, and they produce great products. It would be surprising if they got that decision wrong at the same time that they got every other business decision right.
If there were a widget that you could give to a poor person to turn them into a rich person, I would give all my money to whoever could distribute widgets most effectively and fairly. If someone could distribute the most widgets by pocketing $999 of my $1,000 contribution and spending the last dollar on widgets and overhead, I would give that person all my money, and gladly.
If there were such a widget.
But the assumption there is that charity/development work in the same way as businesses, i.e., in delivering products. I’ve been around non-profits enough to know that that’s not how they work. Transformation happens — if it happens at all, and that is far from guaranteed — through person-to-person contact. The reason that international development is such a famously spectacular failure is that it’s assumed to be a service-delivery activity. I think anyone with overseas experience will acknowledge that people’s intrinsic motivation matters to outcomes. Intrinsic motivation that needs to be helped along with a salary 8-10 times the national median household income is… not very motivational to me.
And it goes without saying that I have no idea what these CEOs do with their salaries. For all I know they both sponsor a thousand kids each and thereby bring themselves down to more typical salary levels. That is their business.
And, if it wasn’t clear from the final sentence, the relationship between my salary to the U.S. national median household income is indeed how I justify taking home an order of magnitude more than do the people I employ when overseas. (It’s not great, I admit, since I don’t believe that nationality should factor into moral decisions, but I have to live with myself somehow.)