August 2017

Mohammad Anas Wahaj | 31 aug 2017

Executive pay is always a topic of debate and more so when it is a case of nonprofits. Moreover, when nonprofit healthcare executives are in focus, the dynamics of the issue become even more complex. As healthcare is an essential aspect of everybody's life, rich or poor, and has a humanitarian dimension, the issue is an everyone's concern. In healthcare, just like in education, for-profit and nonprofit delivery models co-exist, but general population treats these sectors as noble and a large number despises the business-like profit-making approach. A debate is brewing up at the University of Vermont Medical Center (USA), a nonprofit healthcare provider, where CEO's salary is more than US$ 2 million. To justify the compensation, hospital board members say that their executive pay is in line with competitors and makes up a small portion of their budget. But there are other differing views. Sen. Chris Pearson (P/D-Chittenden) says, 'To see that the CEO of our hospital is getting US$ 2 million...it's just way out of whack with the Vermont economy.' State of Vermont has 14 hospitals, all of them nonprofits. Kevin Mullin, the state's chief health care regulator, decided to highlight the salaries of top officials in these hospitals. He says, 'I think it might be illuminating to the public.' Scottie Emery-Ginn, UVM's board chair, justifying executive compensation, says, 'Our health care professionals come from a national market...In order for us to get the best people and keep the best people, we need to pay competitively.' There are no clear rules on salaries of nonprofit employees. The IRS requires only that compensation be 'reasonable', which has been interpreted to mean comparable to similar organizations. A Wall Street Journal analysis of Form 990s found that, in 2014, 2700 nonprofits provided seven-figure compensation packages, and 3/4th of those organizations worked in the health care sector. Executive pay is a concern during the debates on cost of medical care. The US spends US$ 3 trillion annually on health care - more than any other country - and administrative costs are 20-30% of that sum. Sen. Pearson says, 'It obviously inflates our health care costs...When you have public-relations people at the state's largest nonprofit hospital making half a million a year, it undermines confidence in the entire system.' Views of other employees are important in this regard. Maggie Belensz, a nurse at UVM's neurological unit, says, 'It's difficult to hear those numbers as a nurse.' Laurie Aunchman, a UVM nurse and president of Vermont Federation of Nurses & Health Professionals, acknowledged the need to pay competitively but said the hospital should balance 'offering someone a million dollars or 2 million dollars' with investing money in 'taking care of the patient.' Mari Cordes, a UVM nurse and health care activist, says, 'We think it's an ethical issue. That excess money could be used to improve access to health care for everyone in Vermont...It could be used to provide support for people actually providing the frontline high-quality care.' Dr. Deb Richter, a universal health care proponent, described executive pay at Vermont hospitals as 'obscene.' Read on...

Seven Days VT: Million-Dollar Question - How Much Should Nonprofit Hospital CEOs Earn?
Author: Alicia Freese

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Mohammad Anas Wahaj | 23 aug 2017

Rapid pace of innovation is the defining feature of the current era. According to the World Economic Forum, 'The speed of current breakthroughs has no historical precedent.' Financing industry now have innovative lending platforms, both for-profit and nonprofit, for small businesses. But there are concerns regarding many products as they may trap small businesses in a cycle of debt. Gina Harman, CEO (U.S. Network, Accion), explains the challenges that nonprofit lenders face due to rapid innovation happening in the industry and shares insights from the conversation between industry experts - Kate Mirkin (Salesforce.org, Salesforce's nonprofit social enterprise); Prashant Reddy (DemystData); Patrick Davis (CRF, Community Reinvestment Fund); Shaolee Sen (Accion). Myth 1 - The only barrier to scale is the absence of technology: Technology investments get wasted if there are no capable people to deploy it internally and manage the necessary changes in business processes. Challenges are even more when multiple organizations are involved in the project. Establishing and maintaining discipline is essential. Right technology with right data is required to maximize its utility. Myth 2 - For nonprofit organizations, passion to serve more people outweighs fear of change: Nonprofits must overcome lack of investment in talent, knowledge and resources required to drive technological innovation. Nonprofit organizations in business lending industry must consider change necessary to better serve their stakeholders. Collaborative approach to manage technological change must be adopted between the organization and the key stakeholders. Myth 3 - Only organizations with large technology budgets can innovate: Small investments in incremental improvements can add real value to organizations. Even effective data utilization can bring transformative changes at low cost. Within the social impact and mission-driven space, an approach with shared purpose and collective interests can help organizations collaborate and pool resources to implement and utilize costly technological innovations to provide value to the group. Read on...

Huffington Post: 3 Innovation Myths that Nonprofit Lenders Should Abandon
Author: Gina Harman

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