In recent years non-profits have been changing the titles they use to describe their leaders. It used to be the top person was almost always called an executive director. That is still the title of choice for many organizations, but many others now call their leader a president. That's fine. The word connotes a greater stature and more clearly differentiates the leader from department directors. It seems a helpful distinction and it does no harm.
But I've also noticed that more non-profits are styling their presidents as "President and CEO." That harmless little acronym CEO sounds awfully corporate to me. It is certainly true that the president of a charity also is the "chief executive officer" of the organization, and I understand that some organizations use the extra title to indicate that the person holding the title of chairman isn't also the top executive involved in day-to-day management. Still, such a double-hung nameplate seems out of place in the charitable world if only because it is so closely associated with corporate America.
Such title creep is insidious because it is the first step toward treating non-profit executives as if they are executives of for-profit companies. The trend is akin to the ridiculous IRS practice of referring to taxpayers as its customers--as if we had a choice to take our business elsewhere.
The source of such careless usage is the failure to understand the fundamental purpose of the organization. Just as taxpayers can't file their tax returns with a private sector Taxes 'R' Us, neither can the president and chief executive officer of a charity deliver shareholder value nor be paid a share of profits.
Ordinarily, my consternation about titles would be rightly dismissed as mere semantics were it not for the seemingly unending supply of non-profit executives who get themselves in trouble for living like corporate bigwigs, and the boards who let them do so.
The most recent case is that of American University's high-living Benjamin Ladner who enjoyed an annual compensation of $800,000, a mansion, a chauffeur, a maid, a social secretary and a French chef. The latter took several "personal development" trips to Paris, London and Rome on the university's dime. When the university finally dismissed Ladner--after an investigation triggered by a still-anonymous whistle-blower--the board of trustees approved a $3.8 million golden parachute. The mind boggles.
The campus uproar that ensued was fueled in part by the widening gulf between the board and the rest of the university. Dissidents noted that most of the trustees were corporate types who saw no problem with Ladner's compensation or his send-off package. Their standard of comparison, apparently, was the corporate sector. In that context Ladner's compensation would have been appropriate or even modest given the assets of the university. But the trustees failed to understand the purpose of their organization.
Certainly a successful fundraiser such as Ladner deserves fair compensation, but not at the expense of his obligations as an educator and the steward of the university's mission. As attractive as the homes, offices and clubs of the big donors may be, they are not the milieu of the educator or non-profit executive. They are places to visit for appointments, not to live and work.
It appears that the board's corporate mindset and the president's willingness to go along with it was the root cause of American University's embarrassing excesses. That mindset also led to investigations of American University by the IRS, FBI and Senate Finance Committee. The committee chairman, Sen. Charles Grassley, is sure to follow up, having described Ladner as the "poster child" for the need to reform non-profit governance.
Maybe changing the way we describe our leaders is the place to start that process of reform. Ya think?
Bruce Collins is corporate vice president and general counsel of
C-SPAN, based in Washington, D.C.