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“Give us the dollars to do the work, and we will do the work”: Clark County nonprofits balance transparency with trust

Donations keep organizations going, but restrictions complicate efficiency of day-to-day operations

By Chrissy Booker, Columbian staff writer
Published: September 21, 2024, 6:11am
13 Photos
Members of Fourth Plain Forward's Birth Keepers program attend a training session on Sept. 7. The program trains doulas, who help mothers before, during and just after childbirth.
Members of Fourth Plain Forward's Birth Keepers program attend a training session on Sept. 7. The program trains doulas, who help mothers before, during and just after childbirth. (Photos by James Rexroad for The Columbian) Photo Gallery

Paul Burgess at times feels like he’s chasing his tail. When he became executive director of Fourth Plain Forward in 2022, he was the only employee. Since then, the nonprofit founded to energize the neighborhoods along Vancouver’s Fourth Plain corridor has grown to 11 full-time staff members.

With that expansion comes challenges: donor fatigue, budget restrictions and pressure to justify expenses essential to an organization’s operation but not directly connected to programs, also known as overhead.

Because they receive tax exemptions and rely on donations, nonprofit organizations such as Fourth Plain Forward must publicly report their finances, including salaries and expenses. As Fourth Plain Forward expands, Burgess has had to balance grants that come with restrictions with the organization’s overall stability. He believes transparency is important but so is trust.

“Give us the dollars to do the work, and we will do the work. We have the passion, the knowledge and understanding to do it,” Burgess said. “People see it (nonprofit work) as something you do out of the goodness of your heart, but … we’re as much a revenue-generating machine as a for-profit. It just so happens that that revenue goes into programmatic work that isn’t creating a profit. We’re always chasing our tail trying to find revenue.”

How much do Clark County nonprofit CEOs make?

Highest paid CEOs generally work in the health care industry
Executives in the nonprofit sector tend to make less than their counterparts in the for-profit world, according to the National Council for Nonprofits.
The most common type of nonprofit is established under section 501(c)(3) of the United States tax code.
According to the Internal Revenue Service, these organizations are exempt from paying federal taxes if they are: “charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals.”
The U.S. tax code also offers tax-exempt status to hospitals, credit unions and country clubs if they file the necessary paperwork with the IRS.
A nonprofit’s board of directors is responsible for hiring and establishing salaries based on a variety of factors, including job experience, responsibilities, the organization’s mission, projected growth, location and the organization’s size, according to the council.
According to the IRS, compensation should be “reasonable,” which is defined as “the value that would ordinarily be paid for like services by like enterprises under like circumstances.”
The IRS has the authority to revoke the tax-exempt status of an organization paying “excessive” salaries, but it doesn’t define what that means.
“The joke is that nobody goes into a nonprofit to get rich. But that also doesn’t mean that it’s responsible or appropriate to expect our nonprofit leaders to have to be scraping by every month,” said Siobhana McEwen, executive director of Southwest Washington Equity Coalition in Vancouver.
Charity Navigator’s 2016 Charity CEO Compensation Study revealed of 4,587 nonprofits polled, 10 paid their top executive $1 million or more, while 66 paid their CEOs between $500,000 and $1 million.
In 2022, the nonprofit organization in the U.S. with the highest paid CEO was Ernie Sadau of Texas-based Christus Health, with an estimated salary of $16 million.
That year, seven of the top 10 nonprofits with the highest paid CEOs belonged to the health care industry, according to a report by Statista.
This remains true locally, where PeaceHealth President and CEO Elizabeth Dunne was paid a $3,554,035 base salary and $57,901 in other compensation, according to PeaceHealth’s 2023 990 tax forms.
Former president of Columbia Community Credit Union Steve Kenny, who retired in January 2023, received $1,301,844 in base salary and $22,048 in other compensation, according to 2023 tax documents. Current president, Lindsey R. Salvestrin, received $614,308 in base salary and $153,339 in other compensation.
iQ Credit Union President and CEO Eric Petracca received $726,472 in base salary and $60,298 in other compensation, according to 2023 tax documents.
High pay at hospitals and credit unions can be head-turning, but part of establishing executive compensation is looking at nonprofit employers with similar missions, similar budget size and location, according to the National Council for Nonprofits.
On average, wages within the nonprofit sector are significantly lower than the for-profit sector, according to an executive report from the Nonprofit Association of Washington.
In 2021, the average annual salary of a nonprofit worker was $68,318, while the average salary for other sectors was $83,585.
-- Chrissy Booker

Fulfilling the mission

A big part of Fourth Plain Forward’s mission is to uplift Black, brown and Indigenous communities, as well as those with limited resources.

The organization, which formally registered as a nonprofit in 2018, was formed by six local agencies — the city of Vancouver, Clark County Public Health, Workforce Southwest Washington, Vancouver Public Schools, Vancouver Housing Authority and Evergreen Habitat for Humanity.

In 2021, the Community Foundation for Southwest Washington and the Cowlitz Tribal Foundation Clark County Fund gave Fourth Plain Forward a three-year $225,000 grant to help it build organizational capacity.

The nonprofit is based at Fourth Plain Community Commons, which lies just east of Grand Boulevard. The mixed-use complex opened in September 2023. It’s owned by the city of Vancouver, which collaborated with the Vancouver Housing Authority on the project. The complex includes a commercial kitchen, office space and a common area, where Fourth Plain Forward hosts community events.

The organization also offers grant-writing services for other nonprofits, business and cooking incubators, as well as a program to train doulas, those who help mothers before, during and just after childbirth.

Since Burgess took over, he’s worked side by side with donors, community partners and state agencies to triple the size of the organization. Fourth Plain Forward’s 990 form filed with the IRS for 2022 shows annual revenue of $358,841 for that year, and reports Burgess received $89,769 in compensation.

Since then, the nonprofit has landed even more money. In August, the Washington State Department of Commerce awarded $1.39 million to Fourth Plain Forward as part of a statewide initiative to address wealth disparities and promote homeownership.

A portion of that money will be used to set up the nonprofit as a long-term lending agency, while the rest will be offered as loans to businesses led by people of color at lower interest rates than traditional financial institutions offer.

Also in August, the Washington State Department of Health awarded $95,000 to Fourth Plain Forward to reduce economic and health disparities caused by climate change in Vancouver, particularly along the Fourth Plain Boulevard corridor.

The organization’s operating budget was $1.1 million this year, Burgess said. But the windfall comes with strings attached.

“We have programmatic funding that can only be spent on specific things because the donor wants to see the thing they paid for,” Burgess said. “We really need to have a conversation with donors to get them to understand where that money goes and how things have to be spent.”

Budget restraints

Some nonprofits are powered mostly by donations, like Vancouver-based Southwest Washington Equity Coalition. Others, like Fourth Plain Forward, rely on grants or contracts with government agencies — and that money comes with restrictions.

On the flip side, unrestricted grants and donations can go toward operational expenses, salaries and other overhead.

“There needs to be some leeway between restricted funds and unrestricted funds and the recognition that nonprofits need to have that flexibility within our funding to hire good staff, have decent computers and revamp our websites,” Burgess said. “If I have a strong team who knows what they’re doing, then the outcomes will be much better. You obviously need checks and balances, but the work gets done even better when we’re not constrained. There’s no need to restrict us.”

Southwest Washington Equity Coalition’s executive director, Siobhana McEwen, also understands the pressure on nonprofit leaders in Clark County. The coalition, which has three employees, works to bring the voices of communities of color into policy- and decision-making.

“I would encourage folks to consider supporting nonprofits through unrestricted donations,” McEwen said. “The organization tends to know what it needs more intimately than anyone else in the community. You can donate millions of dollars, but those funds come with a lot of strings attached and are very restricted and create, oftentimes, a nightmare for nonprofits.”

McEwen said the restriction of funding can also lead organizations to veer from their original missions because they’re chasing revenue.

“They have to pay their staff and keep the lights on, but they can’t get the funding to do it, and they drift further and further away from their mission in order to go after dollars that are available,” McEwen said. “It definitely creates a significant challenge for nonprofits as they try to figure out how to both meet a very severe need in the community, while also keeping their employees and their organizations healthy.”

Starvation cycle

Nonprofits across Washington serve and employ hundreds of thousands of people, according to the Nonprofit Association of Washington.

In 2021, 6,735 active 501(c)(3) nonprofits employed 235,118 people. Nonprofits make up 7.02 percent of the workforce of Washington.

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Additionally, nonprofits paid $16 billion in wages and leveraged volunteer labor valued at approximately $4 billion in 2021, the association reported.

Still, nonprofits face similar challenges as the for-profit sector, including workforce shortages and high turnover rates.

Matt Morton, president of the Community Foundation for Southwest Washington, refers to it as the “nonprofit starvation cycle.”

“We continue to do more in the nonprofit sector with less,” Morton said. “Nonprofits are not immune to inflation and not immune to the cost-of-living increases.”

The foundation is a nonprofit itself but also a large funder of other organizations in Clark, Cowlitz and Skamania counties. All of the organization’s strategic grantmaking — funding it oversees — is provided as general operating support, as opposed to funding for a specific project or program.

Morton believes donors should lean on the expertise of the nonprofit sector, just as an investor in a private company would lean on the expertise of its leadership.

“When we do it that way, we see greater capacity to grow faster. We see greater innovation coming out of the nonprofit sector,” Morton said.

He and other nonprofit leaders said it’s important to open a conversation about charitable giving.

Part of advancing the nonprofit sector isn’t working alone in silos but coming together as a collective to make the biggest impact, Burgess said.

“Freeing the reins to enable organizations to do that,” he said, “is the way forward.”

Editor’s note: This article has been updated to include the correct amount of a three-year grant. 

Community Funded Journalism logo

This story was made possible by Community Funded Journalism, a project from The Columbian and the Local Media Foundation. Top donors include the Ed and Dollie Lynch Fund, Patricia, David and Jacob Nierenberg, Connie and Lee Kearney, Steve and Jan Oliva, The Cowlitz Tribal Foundation and the Mason E. Nolan Charitable Fund. The Columbian controls all content. For more information, visit columbian.com/cfj.

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