News flash: Managing a non-profit organization is real business

After many years of working in a non-profit organization I became convinced that the main difference between for-profit business and non-profit business is in the availability (or lack thereof) of dividends. Plus for-profit companies prefer not to pay dividends and markets pressure corporations to act in stakeholder’s interests (not just shareholder’s) … I leave the math to you.
Given these premises I’m not surprised that Mitchell Baker, CEO of Mozilla Foundation, was paid good money in 2006 (see Mozilla Financial FAQ for a breakdown of her $500,000 salary). Charity Navigator’s FAQ (a site that helps US-based donors evaluate non-profit organizations) comment on non-profit’s CEO salaries:

it is important to consider that it takes a certain level of professionalism to effectively run a charity and charities must offer a competitive salary if they want to attract and retain that level of leadership.

And that’s the important bit. According to Charity Navigator, average salary for a charity CEO is $145,000 per year. That’s peanuts, compared to the $14 million compensation received by the average CEO of a S&P company.

Of course, if you pay peanuts you get monkeys, as my father-in-law says, and you don’t want monkeys running your charity. Mitchell has done a good job at Mozilla Foundation and she deserves recognition and an incentive to keep it up. Not only I don’t see a problem but I hope salaries for non-profit CEOs will get higher to attract the best managers.

The problems start if non-profit CEOs compensation is very high compared to total expenses. Peter Brown, FSF’s Executive Director, received about $70k in 2006 (9% of expenses) while Shari Steele, EFF’s Executive Director, received about $150k in 2005 (5% of expenses). Salaries are proportional to the size of the organization: EFF’s income is $2.7 million, compared to a mere $800k for FSF.

Unfortunately this level of transparency is non-existent in comparable non-profit organizations in Europe. I don’t feel comfortable donating without knowing exactly how my money will be spent in detail, especially regarding compensation for the executives.

Politecnico di Torino launches copyright consulting services

Politecnico di Torino and Regione Piemonte have launced SeLiLi, Servizio Licenze Libere, a service to offer information and consulting services on legal, technological and economical matters regarding copyright licenses. Given the credibility of the Politecnico and in particular to the group that maintains the Creative Commons licenses I think they can do a good job spreading news in Italy.

SeLiLi’s mission includes giving advice on copyright for all kind of creative arts, from graphic arts to software, making its scope wider than that of FSFE’s Freedom Task Force. This, BTW, proves that everybody, for-profits and non-profits, have to face competition. I wish the best to these friends in Torino.