The Public Service Compensation Index: From a Vow of Poverty to Bonfire of the Vanities' Wall St. tycoon

NOTE[ see spreadsheet at home \cnphome

and http://www.nccs2.org/KnowledgeBase/ideaShow.php?id=8261 (SOI Exec. comp)]

== CHRONICLE ON PHILANTHROPY PREP ==

Charities are expected to provide a public benefit. The antithesis of a public benefit, in IRS parlance, is private inurement, which, in addition to compensation beyond fairmarket rates, is also defined by the IRS as "unreasonable compensation."

Let's play with this for a moment. What's reasonable?

== INTRODUCTION: SOMETIMES THE RESPONSIBLE APPROACH IS TO THINK IN TERMS OF ZERO-SUM GAMES ==

Our world is based on continual economic growth. We pay huge salaries with the rationale that those receiving them will lead their organizations to grow contually at rates of 5, 10, 20 percent.

But let's do a little thought experiment. Assume that we know for a fact that there will be no economic growth for the next twenty years. How would you want to pay your executives then?

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Maybe we can go back to the go-go days of the late 1990s when we felt confident that we and our children could climb the golden staircase of prosperity --good jobs on Wall Street and in internet startup jobs, with ever-expanding and ever-hiring behemoths like Microsoft and Google, or as part of the booming construction industry. But I doubt it.

There's little chance to turn back globalization. A more protectionist trade policy might help some, but not a lot. Enormous federal budget deficits driven by an aging baby boom population, and weak state and local government finances will severely limit what government can do to support and promote economic and job growth.

And then there are those little threats of climate change and terrorism. Maybe they will be nothing more than the 21st century equivalents of the mid-20th century population bomb and Cold War -- prophecies by rabid doomsayers, maybe based on legitimate causes for fear or maybe not, that never amounted to much when it came to real-world impact. But I find it hard to be optimistic. We keep adding CO2 to the atmosphere as the world's population continues to expand and advances in technology offer new tools for forces of violence and instability. In short, prospects for rapid economic growth seem dim.

And even if I'm mistaken, I'd still argue that the right thing to do, the prudent and fair thing to do, is for the leaders of nonprofit organizations, political leaders and other public leaders (public intellectuals, informal community leaders, etc.) to plan and act based on the the resources that we have, not on wishful thinking about the prospects for a return to economic and social prosperity and development.

If there's one thing that the nonprofit sector should stand for, it's a commitment to the public good.

METAPHORS, HYPOTHETICALS, EXAMPLES:

* President of Greece irresponsibly spent his/her country into near bankruptcy. Argentina and Falkland war; other countries with high inflation....

* Household metaphor: Piling up debt

* Not going to the doctor

*

2010-03-06