Albany, NY – Gov. Start Scrutinizing Salaries from Nonprofits


Albany, NY – New York state on Thursday began seeking data on salaries at nonprofit social service agencies that receive state funding and tax breaks while some of them are paying six-figure salaries.

The task force of Cuomo administration personnel and legislators wants to evaluate how appropriate the salaries are compared to the agencies’ missions and if taxpayers are getting an adequate return.

The task force began sending letters seeking specific data from thousands of nonprofits.

Some nonprofit operators have argued, however, that some six-figure salaries are necessary to attract doctors, effective managers and other professionals to serve often low-income, underserved neighborhoods when they could command much higher wages in the private sector. Nonprofits are created to provide public health care, education, housing and other services often in low-income areas at a lower cost than government could.

Task Force Chairman Benjamin Lawsky said he suspects most of the agencies carrying out health care and other services are fine, but “patches of outliers” pay salaries that may be out of whack.

“There are nonprofits who pay very high compensation and the question is, as they receive state funds, what justifies them having nonprofit status, what good works are they doing, and how much money are they receiving from the state and through tax benefits that are going to their good works and how much is going to their top executives?” Lawsky said.

A state Division of Budget analysis in 2010 found nearly 2,000 nonprofit employees were paid $100,000 more for an average of $168,555 and at a total of $324.6 million.

One of the cases that raised Gov. Andrew Cuomo’s concern involved former state Sen. Pedro Espada Jr., whose Bronx health care clinics known as Soundview won a court order this week to stop the Health Department from effectively closing facilities by banning a clinic from the Medicaid system. A hearing is set for Sept. 19. Espada argues the Health Department action was a “rush to judgment.”

Espada, who faces federal charges that he misused government grants for a lavish lifestyle, said in an interview that six-figure salaries, such as the $150,000 salaries paid to his doctors, are needed to attract managers and professionals to serve areas such as the poor Bronx neighborhoods where his clinics serve 24,000 people.

Espada makes more than $200,000. But he says he has stepped aside from Soundview, pending the Sept. 19 hearing, so the focus will be on the clinic and not him.

“It’s easy to score political points,” Espada said of the task force examining compensation. “We should have a sense of balance, but if you curtail and even cut it off you will have a tremendous brain drain in these areas.”

Sen. Carl Marcellino, a Long Island Republican, says the review could result in new rules for compensation.

“By working with the not-for-profits, we will be able to craft solutions that protect those that are doing business the right way and address those that are wasting taxpayer dollars for personal gain,” Marcellino said.

Recap: Corruption and Fraud at Crown Heights Jewish Community Council Inc. (CHJCC)


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