Would you Support a Children’s Cancer Nonprofit that Pays its CEO Half a Million?
St. Jude, the beloved pediatric cancer hospital, pays around half-a-million dollars for its top execs — forking out $477,920 for the annual salary of its CEO and even more for its COO: $522,334.
When those figures hit social media recently, some cancer parents resolved to stop donating to the Memphis facility that treats an average 7,800 young patients a year. Other critics pointed a finger at St. Jude’s advertising extravaganzas featuring cameos from Hollywood’s hottest. Wouldn’t donors’ money be better spent on worthier causes than Jennifer Aniston’s camera-ready hairstyle?
I’m with St. Jude (sort of).
While those salaries (and star-studded advertising campaigns) give pause, they need to be viewed in the context of a behemoth that strives to acquire the best talent to steer its multimillion-dollar operations toward its vision. St. Jude is the tenth-largest charity in the nation with total expenses in excess of $840 million. Its CEO salary claims just 0.05 percent of those expenses, about the same percentage of the salary allotted to the CEO of the American Cancer Society, the country’s seventh-largest nonprofit.
Much as a nonprofit needs its top executives to demonstrate passion for the cause, it needs their business chops more. Entrepreneur Dan Pallotta demonstrated this when his for-profit company was hired to take over fundraisers for breast cancer and AIDS charities. Pallotta’s company collapsed after nine years of collaboration, following negative publicity over revelations of his company’s for-profit status and his own salary ($394,500). But when the breast cancer charity staged its own fundraising event, revenue slumped from $71 million to $11 million.
Nonprofits can only grow if they use the same business tools as the corporate world — advertising, risk-taking, competitive salaries and profits to gain capital, says Pallotta in his book “Uncharitable.”
But how do you know if the children’s cancer nonprofit you support is one that is at least viable and principled? Charity Navigator, an organization that ranks a nonprofit’s ability to be “efficient, ethical and effective” by analyzing its financial data, might be a good place to start.
I was interested to see that St. Jude got three stars out of a maximum of four. Here’s a few of Charity Navigator’s rankings for smaller childhood cancer-related nonprofits.
- Cancer Survivors’ Funds: Provides scholarships for young cancer survivors. Zero stars
- Make-A-Wish Foundation: Fulfills wishes of young patients with life-threatening medical conditions. Ratings vary widely from chapter to chapter, with most getting two or three stars.
- Children’s Cancer Recovery Foundation: Delivers simple acts of care and kindness to children and their families with cancer. Two stars
- Alex’s Lemonade Stand Foundation: Strives for a cure for all children with cancer. Four stars
- St. Baldrick’s: Funds childhood cancer research. Three stars
- Children’s Leukemia Research Association: Supports research to find the causes and cure for leukemia. Zero stars
- Children’s Cancer & Blood Foundation: Supports treatment for patients at the New York- Presbyterian/Weill Cornell Medical Center. Four stars
- Pediatric Brain Tumor Foundation: Seeks to find cause and cures for brain tumors; increase public awareness. Three stars
- Children’s Brain Tumor Foundation: Seeks to improve treatment and quality of life through research, support, education and advocacy. Two stars