There is a pay gap among L.A.’s top nonprofit executives.
Arts organizations, including the region’s prominent museums and orchestras, pay the highest executive salaries — as much as 11 times more than what leaders with the largest social services organizations earn, according to annual public filings with the IRS.
The biggest nonprofit in L.A. by expenditures — Los Angeles Lomod Corp., which addresses housing needs for low-income families — paid its president and director, Connie Loyola, a base salary of $126,018 in 2016, the most recent year data was available. That same year, the Los Angeles Philharmonic Association paid its president, Deborah Borda, a base salary of $1,396,181, according to public filings.
“Not only do arts organizations pay better, but so do education and health organizations — they pay significantly more than social services or human service sector jobs,” said Gayle Northrop, a senior faculty adviser with the UCLA Anderson School of Management, who consults on the social impact of nonprofits.
Northrop and others said that pay disparity is largely due to the sources of revenue that support the organizations, including whether funding comes from government agencies or philanthropic donors with deep pockets.
The biggest nonprofits in the county, as ranked by expenditures, are largely funded through governmental programs; executives at these organizations earn far less than their counterparts at arts and music nonprofits.
“They don’t raise any money,” said Adlai Wertman, a professor at USC’s Marshall School of Business social entrepreneurship program. “The other folks raise (tens) if not hundreds of millions” of dollars, he said.
Loyola, a 14-year veteran of Los Angeles Lomod Corp., earned the least among executives at the top 10 nonprofits on the Business Journal’s list of the 50 largest nonprofit organizations. Lomod, which works with the Department of Housing and Urban Development, reported the top expenditures of $478 million in 2016, the most recent year data was available, as well as assets of $28 million and $489 million in revenue.
The second largest nonprofit, Chatsworth-based North Los Angeles County Regional Center, is one of 21 private nonprofits under contract with the California Department of Developmental Services to provide assistance to individuals with disabilities. In 2016, the organization paid $283,474 to Executive Director George Stevens.
The county’s highest paid executives work for Museum Associates and the L.A. Phil, organizations that ranked Nos. 8 and 9, respectively, on the Business Journal’s nonprofits list.
The orchestra reported 2016 tax year assets of $328 million, with $141.3 million in revenue and $130.4 million in expenditures. That year, it paid Borda, who has since departed for the New York Philharmonic, nearly $1.4 million.
“Many funders wouldn’t even donate to a social service agency if they thought the managers were overpaid,” Wertman said. “If a homeless agency executive director got paid Music Center-level pay, it would be treated as scandalous.”
Museum Associates, the nonprofit organization that runs Mid-Wilshire’s Los Angeles County Museum of Art, paid Chief Executive Michael Govan $1,132,122 in compensation plus $188,113 from related organizations and $198,300 from the LACMA museum in 2016. He was the county’s second highest-paid nonprofit executive that year after Borda. As director, Govan has played an integral role in pushing for a $600 million architectural reconstruction of the museum.
The nonprofit economy
In 2016, for the second consecutive year, nonprofit chief executives nationwide received compensation increases approaching pre-Great Recession levels, according to a report from philanthropy research group GuideStar. It was only the second year since the recession in which compensation grew by 4% or more. (Guidestar, which merged with the Foundation Center and is now known as Candid, gathered data from 112,600 nonprofits nationally for the report.)
In L.A. County, the nonprofit sector is responsible for 250,000 jobs and 4% of the workforce, according to Regina Birdsell, president of the Center for Nonprofit Management, a Chinatown-based group that monitors nonprofit trends in Southern California.
As executive pay rises at many organizations, workers are having trouble getting by, Birdsell said, because housing and other costs of living in L.A. are exploding.
“When the workforce can’t afford to do the job that the community counts on, that worries me,” she said.
USC’s Wertman called the pay disparity among nonprofit workers indefensible. “We have a notion that social service employees are supposed to be martyrs like Mother Theresa,” he said.
Pay Disparity Among Nonprofit Leaders
Executive compensation at the top 10 organizations on the Business Journal’s nonprofits list varies by the type of service provided. Compensation data comes from Form 990s filed with the IRS for 2016, the most recent year data is available
Los Angeles Lomod Corp.
Connie Loyola, president and director
North Los Angeles Regional Center
George Stevens, executive director
Los Angeles Police Relief Association Inc.
Diane Whisnant, executive director
Goodwill Industries of Southern California
Patrick McClenahan, president and chief executive
Child Care Resource Center
Michael Olenick, president and chief executive
Access Services Inc.
Andre Colaiace, executive director
Front Porch Communities and Services
John Woodward, chief executive
Michael Govan, chief executive $1,132,122-plus
Los Angeles Philharmonic Association
Deborah Borda, former chief executive and president
Los Angeles LGBT Center
Lorri Jean, chief executive
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