The charitable impulse is an important motivator of executives in the non-profit sector. It is not the only motivation, but it is at least on par with a desire for satisfactory compensation and challenging professional responsibilities. No such impulse is expected to be found in business. As much as we admire the charities, we also respect and even extol successful businessmen who accumulate vast personal wealth while providing a desired product or service and value to shareholders. Yet, we find examples of extraordinary philanthropy among them, from Andrew Carnegie to Bill Gates.
As much as we might admire the charity executive, we don’t want her to be too profit-minded. Of course there is no profit in the non-profit sector, but charities can pay handsome salaries, hand out generous benefits, erect sumptuous offices and accumulate huge surpluses–and they do. The public frowns upon most of those things, which is why Congress and the IRS have focused recently on executive compensation in non-profits. There is no sign that effort has had any appreciable effect on how much charity executives get paid.
