A follow-up On Local Regulation of Nonprofit Salaries

Late last summer, Sam Brunson told us about Suffolk County, New York’s effort to regulate nonprofit salaries.   In his post, Sam discussed some of the reasons why the effort is wrongheaded, at least insofar as it implies that limiting nonprofit salaries to an arbitrary amount will increase charitable impact.  We couldn’t locate the Bill back then, but we promised to stay informed on the story.  Here is a brief excerpt from the Long Island Business News:

The Suffolk County Legislature is considering a bill that would bar the county from funding nonprofit agencies (excluding nonprofit hospitals) whose employees exceed an annual salary of $250,000–the current salary of New York Governor Kathy Hochul. With the legislature poised to vote on Res. No. 1687-2024 at its Dec. 17 meeting,  Legislator Trish Bergin (R-East Islip), who co-sponsored the bill with Legislator Rob Trotta (R-Fort Salonga), noted that some nonprofit executives whose organizations contract with the county are making as much as $400,000 while they work to feed the hungry.

“I find that offensive, quite honestly,” said Bergin. She pointed out that “it doesn’t seem right that a school bus driver who’s just barely hanging on supporting her family,” who “seeks out these nonprofits for clothing and food” while “the person who’s handing her the boxes of food is making $400,000 a year, and the lady driving the school bus is paying her tax bill.” She added that this “money is going to fund that individual’s salary. It just sounds absolutely ludicrous to me.”

 Naturally, the Suffolk County nonprofit community is opposed to the bill:

Regulating not-for-profit organizations’ operations and salaries does not fall under the purview of the Suffolk County Legislature, notes Jeffrey Reynolds, CEO of Family & Children’s Association (FCA), one of Long Island’s oldest and largest nonprofits that runs 50 different programs for 35,000 people a year.  “That’s left to the New York State Attorney General, the federal Internal Revenue Service and the boards of directors of those organizations who have been duly elected,” said Reynolds.  “Perhaps those legislators, and the rest of the legislature, should be focused on saving taxpayer dollars versus micromanaging not-for-profit organizations that are already very, very heavily regulated,” Reynolds said.

  The Bill does not apply to nonprofit hospitals and it allows other nonprofits to apply for a waiver in individual cases.  Here is the operative portion: 

No contract agency shall be eligible for funding by the County of Suffolk from County funds, in any fiscal year where any employee, officer, director, or member of the contract agency received a salary in the previous year greater than the budgeted salary for the governor of the State of New York for that year, as determined by the County Department of Audit and Control.

darryll k. jones