This is one of our editors' picks from our ongoing roundup of Investigations Elsewhere.
The Chicago Tribune reports today that the president of a local nonprofit tasked by the city with providing affordable housing to people with low and moderate incomes earned $685,000 in 2008 – about three times what leaders at other housing development nonprofits in the area make.
Christine Oliver leads both the Chicago Dwellings Association and its management firm, the Community Management Association. Both nonprofits contribute to her salary, which was set by CDA’s board of directors. But the board has just 3 people on it – and she’s one of them. That’s the minimum number of members a nonprofit board can legally have in Illinois. In 2004, the Senate-backed Panel on the Nonprofit Sector recommended having at least five.
According to the nonprofit, as the Tribune puts it, Oliver "took CDA from the brink of bankruptcy and built it into a self-sustaining, financially stable organization that funds research and sponsors conferences on affordable housing."
But Oliver’s compensation is just one sign of a larger issue. According to an investigation in the Charlotte Observer in December, federal rules designed to rein in excessive compensation at nonprofits essentially go unenforced: "loopholes and understaffed regulators allow nonprofits to pay almost any salary."
"The (IRS) criteria for excessive compensation are so loose that they're virtually worthless… " Pablo Eisenberg, a senior fellow at the Georgetown Public Policy Institute, told the Observer. And IRS regulators are spread so thin that just a sliver of nonprofits is monitored:
Most years, fewer than 10 of the nearly two million U.S. nonprofit leaders are penalized for receiving excessive compensation. And the IRS office that monitors nonprofits is so thinly staffed it examines just 1 percent of their returns.