Thanks to a tipster (send in your tips here) I was directed to an article that appeared recently titled Non-profit credit advisers cash in; CEOs earn big as consumers struggle.
The article does make some interesting observations that some of the larger non-profit credit counseling groups do pay their CEOs a tremendous amount of money in compensation.
“Of the 44 non-profits from across the nation approved by the federal government to provide bankruptcy counseling to New Jersey residents, 12 pay their top executives more than $300,000 annually, IRS tax returns show; one New Jersey-based firm paid its top exec nearly $430,000 in 2009.”
The article also returns to the age old claim against credit counseling that they derive the majority of their funding from keeping creditors happy and steering people away from bankruptcy.
“Because many of the non-profits bring in a significant portion of their revenue from debt-management fees, some consumer lawyers say the agencies have an incentive to steer debtors away from bankruptcy filings and into the debt-management plans. Industry officials, however, insist they steadfastly avoid doing so.”
Even some officials of consumer credit-counseling agencies are put off by their colleagues’ high pay. Sylvine Marabotto, president and CEO of the Consumer Credit Counseling Service of New Jersey in Cedar Knolls, said that exorbitant executive compensation packages sully the industry’s image and complicate her efforts to work with other non-profits.
“I had a call from somebody at another non-profit that provides social services that we were referring our clients to. She said, ‘How can you call yourself a non-profit when you pay those salaries?’ I had to explain that’s not us,” said Marabotto, who’s paid slightly more than $65,000 a year to run a small agency with five counselors and about 2,000 clients annually.
Now the size of the salary alone is not the deciding factor on what nonprofit executives can earn. These days salaries are closely inspected and must be in line with what other similar nonprofits are paying. Many companies use independent auditors to determine compensation schedules.
You can read the full article by Harvy Lipman, here.
Non-Profit Credit Counselor CEOs Making Big Bucks by Steve Rhode
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