Tuesday, September 27, 2011

President of United Way of Central Indiana Making Quarter of a Million Dollar A Year Pleads for Donations to Address Poverty

Anyone who has read this blog long knows that I detest non-profits and especially charities that put the financial well-being of their own executives ahead of the cause or causes they purport to support.  Top of my list of such non-profits is the United Way, an organization that acts as a clearinghouse for charitable contributions.

Ellen K. Annala
 Last week United Way of Central Indiana CEO Ellen K. Annala penned a letter to the editor discussing poverty and urging people to contribute to the United Way.

You can bet that poverty is not something Ms. Annala and her fellow United Way executives have to deal with in their personal lives.  Ms. Annala pulls in $251,720 in salary and benefits a year.  Angela Dabney, Sr. VP of Resource Development makes $168,458, Jay Gersey, Sr. VP Community Planning & Strategic Investment earns $169,100, Dale E. Depy, Assistant Treasurer, hauls in $170,275, and Nancy S. Ahlrichs, VP Workforce Development and Diversity makes $136,896.  In total, the organization paid out $7,489,393 in salaries and benefits in 2010 and reported net assets of $108,440,285.

I would strongly urge people interested in giving money to charity to give the money directly to the charity rather than through the United Way.


Nicolas Martin said...

Good advice.

Indianapolis Observer said...

Managing a corporation as large as the United Way takes skill and experience.

Why should you expect corporations to pay millions for their officers and begrudge her that salary?

I'll be she earns every penny.

IndyJim said...

I have only read your blog for a few months. Explain why you hate nonprofits as it hasn't been evident in your blogs during my reading time.

Cato said...

She should make $45K and live a modest life.

Paul K. Ogden said...

Indianapolis Observer,

Are there thousands of other people who could do her job just as well and would be willing to take less. Absolutely. Plus she is head of a CHARITY. Do you think it's right that peopel contribute to a charity and then have an organization like United Way come in and use it for their executive salaries. It's not just her, it's other executives at United Way that make needlessly high salaries. I cited about 5 other people who work there with comfortable six figure salaries.

Paul K. Ogden said...

IndyJim, I don't hate all non-profits. What I hate those is those non-profits who basically exist for the purpose of enriching the people who work at the non-profit instead of performing the work they're supposed to do to be a non-profit organization.

Unfortunatley, the IRS hasn't been active in auditing non-profits. It's the biggest scam going. Set up a non-profit and you don't pay any property or income taxes. All you have to do is pay you and others at the non-profit enough where there's no profits showing.

Jabberwocky said...

I'm with you, Paul. $100K is certainly more than reasonable for any non-profit's CEO.

I'd also add those government functions that are carried out by supposed not-for-profits like the CIB, ICVA, IDI, and DevelopIndy, that are just spinoffs to hide extravagant salaries. Any group receiving taxpayer support should be limited to no more than the Mayor makes.

stAllio! said...

sorry, paul, but you're still wrong on this. united way of central indiana has an annual budget of $64 million. if you want people with the skills necessary to run an organization of that size, you need to pay a salary at least approaching market value.

charity navigator, an independent organization that ranks charities on how effectively they manage their money (among other things) gives them a 4-star rating (the best) for both their handling of financial matters and for accountability/transparency.

in short, united way of central indiana is a top-notch charity that operates well within industry best practices. your belief that nonprofit management should voluntarily slash their own wages is both unfair and unrealistic.

Longhunter said...

This is nothing compared to the CEO of Goodwill Industries in Indianapolis. His is in the order of 8-9 times as much.

Bob Cardwell said...

This is one of the reasons I quite giving blindly to the United Way over twenty years ago.

I try to make my giving more personal and private.

M Theory said...

At my office we have a charity and we all VOLUNTEER our time and would never dream of getting paid for the work we do.

M Theory said...

I was at a downtown party a few years back and met a guy who literally makes his living establishing not-for-profits. He enjoyed bragging about how lucrative the gig was for him.

Jedna Vira said...

Kinda reminds me of the largest non-for-profit organization that acts as a "clearing house" for handouts....the U.S. Federal Government. A lot of waste and highly paid "executives."

Indy Rob said...

In reply to
"Managing a corporation as large as the United Way takes skill and experience."
"if you want people with the skills necessary to run an organization of that size,",

Ellen Annale is actually managing an organization with 150 employees, 250K seems like a lot of money given the small number of employees. UW has 4 executives making over 150K to oversee 150 employees and distribute the funds to about 450 charities.

Downtown Indy said...

I can recall being harassed, embarassed and subtlely but vaguely threatened if I did not fill out and return my 'donation' card some 30 years ago.

I refused to buckle to the pressure even though it supposedly hurt the company's ability to meet its 'goal' (another high-pressure guilt trip imposed by yet some other group of shills). I always felt proud of that and I've never given one cent to UA, mostly because of that experience.

Charities are out there that do not rely on such tactics. Seek them out, as I do.

Paul K. Ogden said...


I give CharityNavigator no credence whatsoever. They seem to have no problem with six figure salaries.

The fact is you do not have to pay those types of six figure salaries to attract people who can do the job at United Way or any of those other charitable organizations. They get paid that much, because they can get paid that much. You suggest there is some sort of marketplace determining these salaries but there isn't.

You don't think there aren't a thousand people who could head United Way and would do as good a job for $100K. There certainly is.

Unigov said...

I agree with Paul - $250K compensation for running a traditional non-profit may be the going rate, but UWCI is basically just a clearinghouse for donations.

It's also a plaything for the well-connected - the UWCI board has 95 members: http://www.uwci.org/index.asp?p=104

UWCI gave IPS $259,500 in 2009. Not the IPS foundation, IPS itself, which spends over $300 MM a year providing fourth rate education that holds black kids back generation after generation.

Finally, as a member of the Colts Business Alliance, UWCI openly advocated for spending $650 million of tax money on a new Colts stadium: http://web.archive.org/web/20041211034440/http://www.coltsbusinessalliance.com/members/members.htm

UWCI lobbied against using that money to help poor people.

IndyJim said...

Paul, thanks for your clarification of your statement about nonprofits. I like data driven assessment and I would encourage anyone who has a problem with nonprofits to review them with great scrutiny.

United Way's funding model can and should be scrutinized, but the focus should be less on the salaries and more on the results of the existence of United Way.

The label nonprofit is probably the worst way to describe the whole sector as there are so many variations of nonprofits. There are the quasi government agencies, associations and membership-based organizations, think tanks, political organizations, hospitals, schools, civic organizations, religious institutions and the more traditional social service entities to name just a few.

The highest paid executives are in education (mostly universities and colleges), the arts and hospitals according recent salary surveys from Charity Navigator and the Chronicle of Philanthropy.

There is such a difference in the outcomes of say the Indianapolis Symphony Orchestra, whose executive is also well paid and the nonprofit that exists for basic needs like food, shelter and clothing. Our scrutiny should be on the outcomes, which takes more research and insgight than simply focusing on the executive salaries. How much a nonprofit spends on personnel should be a part of reviewing a nonprofit, but if I pay a nonprofit CEO $1 million for arguments sake and in turn the social return on investment is $50 million in whatever way that nonprofit serves, whether feeding the hungry, providing shelter or providing you with an expanded creative conscious through the arts), is that not a good investment?

I too believe there are nonprofit CEOs who could be considered highly compensated. As someone with experience working as an executive in the for profit sector and the nonprofit sector and who has served as a board member for various nonprofits, the biggest challenge is measuring outcomes. The for profit sector measures universally by one primary factor, profit.

The nonprofit sector does not have that universal measurement even though many have tried to define it. Social return on investment is the attempt to measure this. Does Ellen in her leadership role provide a good return on the investment of her salary? That is the question.

IndyJim said...

Story which further discusses the point about measuring effectiveness of a nonprofit beyond the salaries. It was in Forbes magazine: