Measure would require more transparency on executive pay at publicly funded organizations
By Matthew Walberg, Chicago Tribune reporter
7:04 PM CST, December 24, 2012
A bill that would require greater transparency on how much executives at publicly funded nonprofit organizations are paid is expected to be voted on by House lawmakers early next year.
The bill was drafted in response to Tribune reports showing that pay rates for executives at more than a dozen major state-funded nonprofits rose at double the rate of those in the private sector in 2009 and 2010, said the measure’s author, state Rep. Greg Harris, D-Chicago.
The reports also found that an increasing number of charities were bypassing public disclosure of how much top leaders were paid by forming private, for-profit management companies through which compensation and benefits were given.
“I don’t think anyone would like to think that the state is subsidizing exorbitant salaries for not-for-profits,” said state Rep. Jack Franks, D-Marengo, chairman of the House State Government Administration Committee.
Franks and two other representatives — David Harris, R-Palatine, and Carol Sente, D-Lincolnshire — signed on as co-sponsors this month after the bill was passed unanimously out of the committee.
The proposed law would require nonprofits seeking public money to disclose pay data for their executives regardless of whether they are paid through a related for-profit entity.
“I’m grateful that the Tribune’s reporting brought this to my attention that there are people out there looking for loopholes,” Greg Harris said. “We have to do everything in our power to … ensure transparency.”
Similar disclosures are now required by the Department of Human Services, the largest funder of nonprofits, which provides social services and health care programs.
Harris’ bill would require disclosures from nonprofits regardless of which state agency is providing funding.
Because many nonprofits provide services to low-income residents, “there’s a sensitivity to salaries because of the people they serve,” Rep. David Harris said.
“But they shouldn’t be afraid to say, ‘I’m running a big operation that commands a sizable salary,'” he said. “You shouldn’t have to be ashamed of your salary, and if you are, well, you probably are making too much.”
The House is expected to vote on the bill in early January.
Copyright © 2012 Chicago Tribune Company, LLC