Governor Cuomo recently announced the creation of a task force to look into the salaries of nonprofit executives who receive State government funding. The Governor said these nonprofits have “a special obligation to the taxpayers that support them.” In the wake of the announcement, the New York Times ran an article on Medicaid funded group homes that focused on one nonprofit, YAI, and its gross misuse of public funds- a misuse that is not the norm. The nonprofit sector is very transparent and is strongly opposed to any fraud or actions that take funding away from programs.
The disgraceful actions of the leadership of YAI – both its executives and board – unfortunately have maligned the reputation of all the hardworking, generally underpaid executives and staff who provide vitally needed social services. Exorbitant pay for some translates into disrespect and mistrust of all. Therefore, to restore this trust, the Human Services Council – a coalition of hundreds of nonprofit providers of social services, the organizations that provide, through contracts with the State, care for the elderly, children, immigrants, the mentally ill, and so many others of our friends and neighbors in need — supports the Governor’s efforts to ensure appropriate executive compensation for nonprofit service providers.
Public trust in so many of our society’s vital institutions continues to erode, to the detriment of us all. The Governor’s call to verify the appropriate use of public funds is correct. The many for-profit companies that derive most of their income from public sources, such as home care agencies and nursing homes, as well as our cultural institutions, public hospitals and universities, for-profit companies that receive tax breaks or government bond money, and government agencies themselves, all need to be examined in this regard to restore public confidence. We ask that the Governor include in his compensation task force responsible representative of the nonprofit social service sector, as well as recognized experts in the field of executive compensation.
We stand ready to work with the Governor and the task force to create appropriate standards of executive compensation for all recipients of public funds – including comparisons between organizations from all sectors of similar size and responsibility, to train boards of directors in their fiduciary responsibilities, to improve the business relationship between nonprofits and the State, and to inform the public of the crucial role played by the nonprofit sector in our society and in our economy.
Contributed by Michael Stoller, Executive Director of the Human Services Council.