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United Way uproar

No changes planned; some charities worry about aftermath

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The United Way of Central Carolinas executive committee expected tongues to wag when it approved chief executive officer Gloria Pace King's $1.2 million compensation package, said Graham Denton, board chairman. But board members didn't quite expect the outcry that has ensued.

"We knew that it was going to be somewhat of an issue," Denton said. "We, frankly, underestimated that it would be as much of an issue as it has become. But yes, we anticipated that we were going to get questions about it when it was disclosed, and knowing that was the case we went ahead and approved it, because we felt it was the right thing to do for Gloria Pace King."

In its most recent tax filing, the local United Way chapter disclosed $1.2 million in compensation to King. On top of her $365,000 salary, bonus, and $36,000 expense account, the board agreed, over 18 months, to put about $822,500 toward her retirement. Last week's disclosure by WCNC has elicited complaints from charitable workers and donors alike.

King's salary is not decided by the full United Way board. A volunteer compensation committee makes recommendations to the board's executive committee -- a group of mostly highly paid professionals from leading Charlotte companies. Denton said the full board -- which has a slate of local bigwigs including John Belk, Wachovia's Ken Thompson and County Manager Harry Jones -- does have economic diversity, however.

Denton said United Way officials "don't plan to change anything.

"It is what it is, number one. ... We're trying to make sure that the public knows that this is not a one-year deal, that it will continue at a lesser amount for another three years after this one. In effect, it will go until 2010."

The retirement payment was an attempt to play catch-up on a retirement fund the board had agreed to set up years ago, Denton said. To put enough into the fund so King can retire on 60 percent of her salary, the United Way will have to set aside larger amounts than it would otherwise. But Denton said he understands how that might look to a donor who makes, say, $30,000 a year. "It is a large amount -- a seemingly large amount," Denton said. "We should've started this much earlier."

Several nonprofit staffers said privately that King's compensation -- even her salary alone -- is more than just a "seemingly large amount." Staffers were reluctant to be quoted on their concerns, for fear of alienating an agency that provided almost $30 million to area nonprofits last year, but said privately that they had been bothered by the high pay and perks that come with the CEO's job. But Kathi Knier, a fund developer for a nonprofit that doesn't receive United Way funding, didn't mind talking. Knier's been troubled by King's pay for years. Last week, she felt compelled to write a letter to The Charlotte Observer.

"Most people do not work in the nonprofit field for the money, most of the time. They love what they're doing, and they believe in what they're doing," Knier told CL. "They do expect to be adequately compensated -- definitely -- but not in such an exorbitant way that I think Gloria Pace King has been."

Among local nonprofit leaders, only the Rev. Billy Graham, whose Billy Graham Evangelistic Association brings in three times the amount raised by the United Way, is paid more. King's salary and bonus exceeds that of United Way leaders in Atlanta, St. Louis, Miami, Chicago and Los Angeles, according to Form 990s, the federal tax filings most nonprofits are required to file.

United Way officials have lauded King's fund-raising performance since she came here in 1994 from a Cleveland chapter, and Denton said he's seen compensation surveys that indicate King's salary and benefits aren't out of line with similarly sized organizations. He declined to provide them, saying he didn't have permission. "While she's on the high end, she's not out of range," he said. "It just depends on how you interpret the documentation and how you interpret the surveys and which ones you look at, 'cause there are a number of them. The ones that I've got show that we're within the ballpark of reasonableness with regard to how we treat our CEO."

Last week, the United Way posted a defense of its leader's pay and benefits, noting that King "has kept the organization's overhead extremely low -- earning a four-star rating in organizational efficiency from Charity Navigator, a charity watchdog group." That's true, although the United Way hasn't had a four-star overall rating since August 2004. Since then, it's maintained a three-star overall rating, except for one year beginning June 2005 when the watchdog group cut the rating to two stars. Sixty-four percent of the 5,324 nonprofits that Charity Navigator evaluates have three- or four-star ratings. Mike Smith, the watchdog group's chief operating officer, said the star ratings don't take salaries into account. "We just report on [pay]," Smith said. "Donors are very interested in what the CEOs and presidents earn. We understand that executive leadership should be compensated accordingly," Smith said. "There isn't a right or wrong percentage, really. It's whether or not the governing bodies of those organizations are able to justify the reasonableness of the salary. The best I can tell you is that it really should be proportional to the size of the organization."

Some nonprofit staffers are worried that concern about King's salary could affect donations at a time when need is paramount. At the Salvation Army's Center of Hope women's shelter, staff have grown so concerned about overcrowding that this week they plan to begin housing women at the Mecklenburg County emergency winter shelter. Deronda Metz, the Army's social services director, hopes the kerfuffle doesn't affect donations made to the organization directly or through the United Way. "I think people can look at the Salvation Army and really get a good glimpse at United Way dollars at work," said Metz. "It's pretty evident that the money actually goes to serve [women]."

As one of the United Way of Central Carolinas' largest member agencies, the Army in the most recent fiscal year received nearly $1.46 from the umbrella charity -- a substantial chunk of its budget, and only about $260,000 more than the CEO compensation package disclosed in the United Way's most recent tax filing.

Knier, who's recently finished a fund-raising campaign, believes United Way might see some of its donations instead sent directly to other charities. "I would think it's going to be more difficult for nonprofits, in a way, to just validate what they're doing. Transparency is just going to have to be at a heightened level."

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