BP# 1 Non-profit executives: how much is enough?



Someone has to run charities and other non-profit organizations, but with the nature of the business, how much should these individuals be paid? They have the job of giving direction and leadership to oftentime large organizations, but there is the concern of wasting donated money on the CEO instead of putting that money towards the cause the charity/organization.

The situation with Wounded Warrior Project is an arguably repugnant example of this. The lavish, unnecessary spending ended in the firing of an otherwise very, very talented group of business executives from the organization. Was the ending of the spending going to cost them too much money in bad leadership down the road? or was the lavish, arguably unethical spending going to cost the organization more in the long run?

From a Utilitarian point of view, this is a conundrum. The money paid out to the executive is money not paid out to the cause the organization exists to further, but poor leadership could completely derail the organization, thus preventing the cause from receiving any help. There is also the question of public trust in the organization, considering that when such an executive is paid so much, a notable portion of the donation base is turned off and chooses to donate elsewhere, but on the other hand, if other groups are ran notably better, a different sub-section of the donation base would stop donating to the organization. In either case, there is a loss of effectiveness.

The Kantian point of view would be fairly simple: they aren’t to be paid too much, just enough. The trouble with this point of view is determining how much is that perfect amount, or what rule determines that amount. There is a profession that delves into this, it is called executive consulting.


Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s