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Business News: High Spending Nonprofits: Charities that Offer the Most Compensation

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Ted Eytan / Flickr

When you picture a nonprofit, perhaps you think of a small charity, complete with selfless employees, minuscule wages and a fierce commitment to “the greater good.” It’s about morals over money, human decency over competitive salaries.

Expand beyond the local level, however, and nonprofits quickly become bigger, wealthier and more corporate — in some cases, practically indistinguishable from their for-profit counterparts. A few nonprofits can be downright lucrative for employees. Even if these organizations don’t turn a profit on paper, much of the extra earnings wind up on the employee payroll.

At FindTheCompany, we pored over IRS Form 990s from 2013 (latest available) to find the 25 nonprofits that spend the most on compensation. Note that “compensation” is more than just salary. The IRS also includes contributions to retirement accounts, housing and car allowances, club memberships for individuals, and other benefits. We’ll start with a chart of raw totals, then look at a second based on compensation per employee.

The top 25 organizations by raw totals include a mix of health and educational organizations. Kaiser Foundation Hospitals tops the list, a nonprofit with over $50 billion in annual revenue, as well as 9.6 million members nationwide. While Kaiser Foundation spends about 10 percent of its annual revenue on compensation, the organization also re-invests billions in “technology and facilities to support member care now and in the future,” according to a Kaiser press release. New facilities in Oakland, Redwood City and San Leandro stand as recent examples, each constructed to comply with modern health and even earthquake safety standards.

Similar to Kaiser Foundation, the next four organizations on the chart are also national health firms, each operating facilities across multiple states. This trend speaks to the high costs associated with healthcare and healthcare professionals — as well as the talent needed to run a competitive health organization. Anesthesiologists, surgeons and general practitioners routinely rank among the highest-paid careers, and each of these nonprofits must pay market rates to hire the right people.

On the education front, John Hopkins University ranks first, with just over $2 billion in compensation costs. As one of the nation’s premiere medical schools, Johns Hopkins must pay some of the same high salaries as the health organizations just above it.

In fact, every university on this list runs a nationally ranked medical school, further confirming the overall health trend. The lone exception to health and education is Battelle Memorial Institute, a science and technology development company. The organization helps scientists, researchers and healthcare professionals by supporting laboratories and developing technology.

While health and science professionals tend to be more costly than those in other industries, another factor here is organization size — each nonprofit on the list employs over 20,000 people. It’s no surprise that the Cleveland Clinic Foundation (32,575 employees), Johns Hopkins University (39,673 employees) and Dignity Health (51,991 employees) spend billions in total compensation. For this reason, it can be helpful to look at compensation per employee as well.

It might seem counterintuitive for nonprofits to lay out so much money in compensation, but the high figures result mostly from the nature of the health industry and the high number of employee — for the most part, average compensation sits just a cut above the national average salary, $50,500.

So next time you picture a nonprofit, keep in mind that the local dog shelter or clothing charity only comprise a small piece of the philanthropic landscape. Some of America’s biggest organizations also do charitable, compassionate work. And they pay pretty well, too.

Compare Millions of Nonprofit Organizations on FindTheCompany

 

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