Jewish social service agencies that receive the bulk of their funding from private sources will probably feel no impact from Gov. Chris Christie’s plan to limit executive salaries and expenses at some nonprofit organizations in New Jersey.
In a budget-cutting move, the governor ordered that as of July 1, top executives of agencies receiving funds from the state’s Departments of Human Services and Children and Families be paid no more than $140,000 a year if their operating budgets exceed $20 million annually.
In addition, the administration plans to impose tight restrictions on employees’ tuition reimbursements and travel expenses, and agencies’ purchase of new cars.
Jacob Toporek, executive director of the New Jersey State Association of Jewish Federations, canvassed his constituents about the caps.
“There wasn’t great concern raised,” said Toporek. “The determination was that because we basically do our own fund-raising for beneficiary agencies, it doesn’t really present a problem.”
Reuben Rotman, executive director of the Jewish Family Service of MetroWest, agreed. “My understanding is that this really applies to agencies that receive the overwhelming majority of their funding from the state — for which their CEO is funded primarily with use of state contract dollars,” he said “This is not currently the case for JFS.”
Leonard Schneider, executive director of the Jewish Vocational Service of MetroWest, said his organization received “substantial” funding from the state, but not through the Department of Human Services or the Department of Children and Families.
JVS does receive $129,000 from the Department of Human Services to provide programs for refugees, “but it is not substantial enough for us to be affected,” he said.
Schneider said he believes that the cap “is going to be hurtful to a number of agencies statewide. Some agencies have their entire budgets funded by these state offices, but not our agency. If we get a grant, that’s one thing. But it is not a totality of a source of funding. It is something to be mindful about. It suggests a direction to the way things may go.”
Marsha Atkind, executive director of the Healthcare Foundation of New Jersey, said the salary caps will not have an impact on her nonprofit.
Yet, she said, she is troubled by the notion that nonprofit agencies with government grants may suffer from state and federal over-regulation.
“These agencies still have their own boards they report to, and there is an issue here about how far the government should go on scrutinizing,” Atkind said. “The IRS already scrutinizes nonprofits quite a bit, and it should. But the question is where that line should be drawn, and it is making some people uncomfortable.”
Atkind said the question of how much a nonprofit spends on salaries and fund-raising, as opposed to how much it dispenses to people in need, “is a very valid issue that a donor should be aware of, and I guess if the government is a donor, it should be aware of it, too.”
But, she noted, “the government gives money to for-profit organizations in various ways and doesn’t put limits on their salaries. It is not across-the-board, whereas with nonprofits that receive government money, it would be across-the-board. They are not being treated the same way.”