LA Homeless Nonprofit Pays CEO $1.6m in 2 Years
· culture
The High Cost of Leading by Example
The recent revelation that Carol Adelkoff, CEO of 1736 Family Crisis Center, was paid over $1.6 million in two years has raised eyebrows in the nonprofit sector. While nonprofit leaders can earn substantial salaries for overseeing complex operations and managing significant budgets, this case stands out due to its sheer scale and timing.
The organization’s explanation that Adelkoff’s compensation was largely comprised of unused vacation time accumulated over four decades strains credulity. According to the Los Angeles Times, Adelkoff has maintained a primary residence in Hawaii while leading the Los Angeles-based nonprofit, which operates shelters, crisis hotlines, and support programs across the region.
This case is striking not only for its magnitude but also for its context. The organization consulted with legal and financial advisors before approving the payout, suggesting that the board was aware of the potential implications of such a large payment, particularly given the nonprofit’s heavy reliance on government funding. Kerry Garvis Wright, an attorney representing 1736 Family Crisis Center, acknowledged this, underscoring the complexity of the situation.
The nonprofit sector has long grappled with issues surrounding executive compensation, citing the need for competitive salaries to attract top talent. However, Adelkoff’s case challenges this argument. According to the Los Angeles Times’ comparison of executive compensation among similar organizations, the median annual salary for leaders in domestic violence services and homelessness support was approximately $159,737. In contrast, Adelkoff earned over $907,000 in 2023 alone.
The nonprofit sector is bound by federal regulations requiring reasonable compensation for executives. However, what constitutes reasonableness can be subjective. Experts have questioned whether it’s acceptable for one employee to accumulate such a large amount of unused leave before receiving a payout. Brian Mittendorf, a nonprofit accounting expert at Ohio State University, noted that “It’s highly unusual for an executive to accumulate that much leave and then receive such a large payment.”
The 1736 Family Crisis Center’s reliance on government funding adds another layer of complexity to this case. As an organization receiving millions in grants from the Los Angeles Homeless Services Authority, it’s reasonable to expect a higher level of transparency and accountability regarding executive compensation. The fact that Adelkoff has maintained a primary residence outside of California while leading the nonprofit raises questions about her actual commitment to the organization.
The fallout from this case may have significant implications for nonprofit governance across the country. As Laurie Styron, chief executive of CharityWatch, pointed out, “This arrangement is highly unusual and highlights the need for greater transparency and accountability in nonprofit compensation practices.” The incident serves as a reminder that nonprofit leaders are not immune to criticism, particularly when their compensation packages appear excessive or unjustified.
This case raises more questions than answers. What message does it send about the values of the 1736 Family Crisis Center? How will this incident impact its relationships with government funders and the public at large? As nonprofit leaders continue to navigate the complex landscape of executive compensation, they would do well to take a hard look in the mirror and ask themselves: are we leading by example, or are we setting a different kind of precedent?
Reader Views
- DCDrew C. · cultural critic
The real kicker here is that 1736 Family Crisis Center's reliance on government funding comes with strings attached – namely, transparency and accountability. It's astonishing that the board would greenlight a $1.6 million payout to Adelkoff without considering the optics of such a move, especially when their programs are ostensibly aimed at assisting those in need. One wonders if this is a case of the haves looking out for their own, rather than genuinely addressing systemic issues like homelessness and domestic violence.
- PLProf. Lana D. · social historian
While Adelkoff's compensation package may be technically compliant with regulations, it raises questions about the priorities of 1736 Family Crisis Center's board. Rather than scrutinizing Adelkoff's earnings, the focus should shift to the organizational culture that allows such payouts to occur. The nonprofit sector's reliance on government funding and tax-exempt status creates a moral obligation to ensure responsible stewardship of resources. By prioritizing executive compensation over direct services, organizations like 1736 risk perpetuating a cycle of bureaucracy, distracting from their core mission to serve vulnerable populations.
- TSThe Society Desk · editorial
This eye-opening story raises more questions than it answers about accountability and transparency in the nonprofit sector. While it's true that competitive salaries can attract top talent, the sheer scale of Carol Adelkoff's compensation highlights a broader issue: the revolving door between lucrative executive positions and government-funded contracts. It's worth examining whether nonprofits are more focused on burnishing their leaders' financial profiles than delivering actual services to those in need.