“Most (nonprofit) organizations are in a place where they’re facing tremendous financial strain because donations to nonprofits have been decreasing over the past couple of years at the same time that their costs are increasing,” said Rick Cohen, chief operating officer for the National Council of Nonprofits.
Nonprofits interviewed by this news outlet say pay raises were necessary to keep high-quality executives.
The Dayton Daily News investigated nonprofit executive compensation following an investigation earlier this year by this news outlet into financial concerns at the Dayton Art Institute ― after which the leader of the museum announced he would be taking a significant pay cut.
DAYTON DAILY NEWS INVESTIGATES
Executive compensation at area nonprofits
Federal law requires transparency of nonprofits in exchange for getting tax breaks, donations from the public and often considerable government funding. For many, that includes listing on publicly accessible tax forms how much they pay their top executives.
A monthslong investigation by the Dayton Daily News looked into how area nonprofits compensate their top-paid executives as they face revenue challenges and financial headwinds.
- » Nonprofits facing revenue losses say executive pay raises necessary
- » From Wittenberg to Wilberforce to welding institute, area private school leaders’ pay rose as revenues declined
- » CareSource CEO paid $12M as nonprofit revenue dropped $1B
- » Government funding cuts put most Ohio nonprofits at risk
- » Search: How much area’s largest nonprofits pay their top-paid employees
- » How and why we investigated area nonprofit CEO pay
Our latest investigation used IRS filings to find 100 nonprofits in our region — including Montgomery, Greene, Warren, Butler and Clark counties — with the largest revenues in 2023, the most recent year for which financial data is available for most organizations. Nearly one-third of those agencies saw a lower revenue in 2023 compared to 2021.
Pay varies wildly
Compensation for the highest-paid employees, such as CEOs and executive directors, can vary wildly from nonprofit to nonprofit.
“Salary is really kind of all over the place,” said Melonya Cook, director of the Master of Arts in Social Work program and a lecturer of social work at Wright State University.
Other than CareSource, the top-paid CEOs in the region oversaw the Community Blood Center ($1.6 million) and Wright-Patt Credit Union ($1 million). They oversee organizations with tens of millions of dollars in revenue.
“The bulk of our nonprofits are making just $5 million, $7 million in their total budget. Those folks are not going to make nearly that amount,” Cook said.
Even among organizations with similar revenues, CEO pay can vary considerable.
Springfield-based TAC Industries paid their CEO James Zahora $193,821 in 2023. This is a 7.1% increase while the agency’s revenue dropped 2.7% to $9.8 million compared to 2021.
TAC Industries is a nonprofit that connects people with disabilities with employment and workforce development opportunities, adult day services, transportation options and other support. They did not respond to requests for comment.
The Miami Valley Hospital Foundation had a revenue of $9.7 million in 2023 and paid their president Jenny Lewis $361,379.
Foundation spokesperson Tim Carrico said Lewis holds multiple positions paid for by a variety of foundations serving Premier Health.
Lewis is president and CEO of the Miami Valley Hospital Foundation, president and CEO of the Good Samaritan Foundation-Dayton, and system vice president of philanthropy of Premier Health. In 2021 she received a title change that put her in charge of the heads of all the foundations.
So while the Miami Valley Hospital Foundation saw a revenue decline from 2021, Lewis saw a pay raise.
COVID /public assistance
The COVID pandemic was a major factor in many nonprofits’ revenues and operations from 2021 to 2023.
Multiple groups nodded to an increase in funds related to pandemic relief, but once that money was expended, donor contributions and other revenue sources were sleepy.
Raises for the highest-paid employee were often justified by the chaotic nature of the pandemic and work that may have been added to leadership’s plates during that time period.
Supports to Encourage Low-income Families — Butler County’s community action agency — saw a 29% drop in revenue from 2021 to 2023, with total revenue reported for the nonprofit in 2023 as $8.7 million. Its former executive director, Jeffrey Diver, saw a less than 3% increase in his salary during that time, increasing from $92,072 to $94,761.
Credit: Submitted
Credit: Submitted
SELF administered $32 million in COVID-19 relief funds from both the state and the Butler County Commission for rent and utility assistance from 2020 to 2024. Sara Starr, who became SELF’s executive director in August this year, said the revenue increased at the beginning of 2021 when the organization received initial funding for temporary pandemic relief that helped residents make rent and utility payments.
“The decrease in revenue from 2021 to 2023 reflects the decrease in funding as the temporary program was closer to being complete,” Starr said.
Diver’s salary was reviewed annually, and the nonprofit’s board approved roughly 1% pay increases for him annually from 2021-2023. Starr said this was a “modest” increase to pay for the nonprofit’s leader, as SELF was “administering a very large relief program that required additional staffing and oversight.”
Similarly, Xenia-based Toward Independence saw a spike in funding from COVID relief and a state grant that inflated its 2021 revenue compared to 2023. While its total revenues dropped 8%, its main revenue source, Medicaid-billable services, remained relatively flat at $15.4 million.
The top-paid employee during that time was former CEO Mark Schlater, who had reported earnings of $276,014 in 2023. He saw a nearly 25% increase in his salary from 2021 to 2023.
Credit: Staff photo by Sharahn D. Boykin
Credit: Staff photo by Sharahn D. Boykin
Schlater retired in December 2023, and part of his salary from that year was a one-time award linked to a retirement and succession plan. Without the board-authorized plan, Schlater’s salary would have increased by roughly 3.2% from 2021 to 2023, according to his successor, Joseph Harmon.
Toward Independence provides residential, day service and transportation services that assist people with disabilities
Dayton Live
The arts is also a sector where leaders of larger organizations are making six-figure salaries.
The Victoria Theatre Association, which does business under the name Dayton Live, paid its former president Ty Sutton a base salary of $297,481 in 2023 with a bonus of $105,000, according to IRS records.
This is 22.75% more than Sutton was paid in 2021. The organization’s revenues were down 22% in 2023 compared to 2021.
Sutton left Dayton Live at the end of 2023 to take the position of president and CEO of the Broward Center for the Performing Arts in Fort Lauderdale, Fla.
“As a not-for-profit arts organization, we strive to provide enriching arts, culture and entertainment activities in downtown Dayton. It’s important for us to recruit and retain top-notch employees to support our mission and values as a premier presenter of the performing arts,” Dayton Live said in a statement.
Part of this process is making sure its salary and compensation packages match industry standards, the organization said.
“Our board of directors, along with our senior staff, are integral to making sure our compensation packages best reflect similar performing arts center benchmarks,” Dayton Live’s statement said.
Competing for leaders
Of 20 nonprofits that increased executive compensation while facing financial headwinds, about half answered questions from the Dayton Daily News. Those who did often spoke of the need to keep their staff pay competitive with the private sector.
“Nonprofits are competing for the same employees as for-profits,” Cohen said. “And so while we generally can’t keep all the way up with for-profits, we do still need to be in the ballpark or we’re not going to be able to hire, recruit and retain the talent that the nonprofit needs in order to do its work more effectively.”
This was a point made by officials with Choices for Community Living, Inc., which provides professional direct care services for people with autism, cerebral palsy, Down syndrome and other developmental disabilities in Montgomery, Butler, Clark, Greene and Madison counties.
The agency’s revenues dipped from $16.9 million in 2021 to nearly $15 million in 2022, then rose to $16.5 million in 2023.
Trent Grooms, executive director, was the company’s highest paid employee all three years. His annual salary rose from $70,502 to $133,804.
“We faced what many industries faced during COVID. We couldn’t get people,” Grooms said.
Choices in Community Living did market analyses in 2021 and 2022 that resulted in across-the-board pay adjustments to compete with for-profit companies to attract and retain talent.
Samaritan Behavioral Health had a similar response. The nonprofit provides outpatient mental health and substance abuse services, crisis care, suicide prevention and counseling services at four locations in Montgomery and Preble counties. It is part of the Premier Health network.
Its revenues declined nearly 6% since 2021 to $20.9 million in 2023, while its leader Elizabeth Esposito saw her pay climb 2.1% to $333,812.
In a statement, Premier Health said its network has a standard system for executive compensation that “uses external data sources and compares groups to ensure salaries are in line with what similar organizations pay.”
“This supports the organization’s ability to attract, retain, and motivate an extremely talented leadership team.”
The statement also said Esposito has responsibilities systemwide.
Of the 20 nonprofits analyzed for increasing executive compensation despite declining revenue, eight saw their CEO retire or take another job either during or after the 2021 to 2023 time period.
