Keith's note: CASIS (The Center for the Advancement of Science in Space) is a non-profit 501(c)(3) organization chosen by NASA in 2011 to manage the portion of the International Space Station that has been designated as a U.S. National Laboratory. Non-profit organizations are established to do things in the public interest and not to generate a profit - or enrich their employees or advisors. Recently the IRS has started to look more deeply into compensation of non-profit executives and staff. CASIS likes to pay a lot of its employees hefty salaries - the top ten employees make much more than virtually everyone at NASA - including the NASA Administrator.
According to the Foundation Group: "There are legitimate, charitable organizations whose executives make up to, and sometimes more than, $250,000. For a very select few, a lot more. But let me put it like this if you have an employee whose compensation package exceeds $100,000, you better be prepared to defend it. Needless to say, Wall Street-style perks and bonuses are out of the question. And, depending on your organization's budget, a $10,000 salary package could be considered unreasonable."
According to a report "Nonprofit Organizations Salary and Benefits Report", published in 2014 by the NonProfit Times "The average salary for a nonprofit chief executive officer/president last year was $118,678. The median salary was $100,000 while the maximum found was $666,266. The average tenure for a nonprofit CEO was almost 12 years and almost 40 percent of participating organizations paid their CEO some type of bonus."
Let's look at the reportable compensation and nontaxable benefits for the top employees at CASIS as listed on their 2013 Form 990, Part VII: Gregory Johnson, President and Executive Director: $148,333 + $5,375; Duane Ratliff, Chief Operating Officer: $225,000 + $31,689; Jorge Fernandez, Chief Financial Officer: $200,000 + $18,689; Charles Resnick, Chief Economist: $220,000 + $30,701; Warren Bates, Director of Portfolio Management: $200,008 + $19,370; James Royston, Interim Executive Director (Until 9-9-14): $228,012 + $11,312, Eddie Harris, Director of Development: $197,000 + $29,986; Melody Kuehner, Director of Human Resources, $160,000 + $27,277; Brian Harris, Director of Business Development, $153,000 + $26,756, and Kenneth Shields, Director of Operations and Education: $131,220 + $32,117. That's 6 employees making over $200,000 a year and 4 others making over $170,000 a year. By comparison the NASA Administrator made $179,700 in 2014. 99.96% of CASIS funds come from NASA. Note: The fiscal year for CASIS ends on 30 September - so they have a while to file their next return with the IRS. Sources report that the 2014 Form 990 for CASIS will show a salary for Greg Johnson in the $300,000 range.
As the IRS looks at things, suitable compensation for non-profit employees is supposed to be gauged by the amount of work they do and comparable salaries at other non-profit organizations. As I noted in CASIS Has No Idea How To Raise Money - Only How To Spend It two weeks ago, CASIS has only one customer/donor: NASA. 99.9% of its funds.
Under NASA Cooperative agreement NNH11CD70A CASIS gets $15,000,000 a year. Under this agreement, as of September 2015, NASA has put $65,900,000 into CASIS. If the current $15 million per year payment continues for 2016-2020 an additional $60,000,000 will be put into CASIS for a total of $125,900,000.
This cooperative agreement between NASA and CASIS runs from 31 August 2011 to 30 September 2020. So CASIS has a 9 year more or less guaranteed income to rely upon. As such, CASIS does not really have to go out and find that income. As such, you have to wonder what all of these high-priced people with "financial" or "development" are doing when this money just falls out of the sky. So far only a trivial few thousand dollars outside of the NASA money have been raised for CASIS.
Note: CASIS Chief Economist Resnick recently left CASIS. CASIS employees were told that this was in connection with a NASA OIG investigation into travel accounting and that there would be additional questions about this issue.
Then there is the issue of paying CASIS board of directors members. According to the Center for Association Leadership: "It is not illegal for a nonprofit to compensate its board members with reasonable fees unless prohibited by the organization's bylaws. 1 If compensation is authorized, it is advised that compensation amounts be set by independent directors or an independent compensation committee with input from outside advisors. It needs to be clear that compensation does not imply monetary profit. It is very important that board compensation be comparable to that of other nonprofit organizations and not deemed excessive by the IRS. 2 .. Section 501(c)(3) contains excess benefits rules, which bar board directors and officers from profiting from their positions within a nonprofit organization. Paying reasonable fees to board members for services may be legal in some circumstances, but paying more than the recognized market average can result in stiff penalties to a nonprofit organization."
According to the 2013 Form 990 filed by CASIS board members Andrei Ruckenstein, France Cordova (now NSF Director), Bess Dawson-Hughes, Gordana Vunkjak-Novakovic, Leroy Hood, and Lewis Duncan are listed as having been paid $49,750. Carolyn Ticknor, Ioannis Miaoulis, Joseph Formichelli, James Abrahamson, and Philip Schein are listed as receiving no compensation.
Six of the CASIS board members were paid $49,750 in 2013. The 2013 return says that this compensation is for 6.00 hours of work per week. (France Cordova is listed as working 8 hours/week and James Abrahamson 15 hours/week - but he was not compensated). At the 6 hours/week work load that's 312 hours per year or $159.45 an hour. If you use the 2,080 work hour/year standard that's equivalent to what someone earning $332,000 per year would earn on an hourly basis. Sources tell me that the actual CASIS board work load is much less and that board members are only expected to put in 2 days per quarter at a meeting. So, let's be generous and assume that they spend a day - each way - for travel (assuming that they travel to meetings) or 4 days per quarter. At 8 hours a day that is 32 hours per quarter or 128 hours a year. Doing the math based on the $49,750 per year rate is $388.67 an hour. $388.67 is what someone making $808,437 a year would make on an hourly basis. Again, I assumed 2 days for travel. If that is not part of the compensation then the $388.67/hour estimate doubles to $777.34/hour for 2 days/quarter. Nice gig if you can get it.
So ... CASIS board members are paid somewhere between $159.45 and $388.67 an hour for their services. To put this in context, the median household income in the United States in 2014 was $51,939 - very close to the $49,750 that CASIS board members are paid for their few days of work every year. Again 99.9% of CASIS income comes from the Federal government which is funded by taxes paid by these households.
Non-profits that engage in a lot of fundraising (or claim to as CASIS does) often look to their board members as rainmakers. As I noted in my previous post in 2013 total revenue for CASIS Was $15,285,388. They received $15,273,635 from NASA; $9,193 from other sources, $2,525 from investments - and $35 from memberships (sounds like they only had one member). 99.9% of their income was from NASA. So these board members seem to not be doing much in the fundraising department - despite the high hourly rate that the majority of the board members are paid.
All non-profit organizations are supposed to make the mechanisms whereby they are governed and details of their finances public. If you look at Form 990 Part VI Section C Disclosure #18, it says "Section 6104 requires an organization to make its Form 1023 (or 1024 if applicable), 900, and 990-T (501(c)(3)s only) available for public inspection. Indication how you made these available." The boxes "own website" and "upon request" were checked. Form 990 Part VI Section C Disclosure #19 says "Describe in Schedule O whether (and if so, how) the organization made its governing documents, conflict of interest policy, and financial statements available to the public during the tax year". If you go to Schedule O on the 2013 Form 900 sent to the IRS CASIS says "The organization makes its governing documents and financial statements available to the public on its website and upon request."
I have done a thorough search of the CASIS website and looked around via Google. Their conflict of interest policy, dated 14 March 2012 is posted here. But the only place I can find CASIS 990 returns is on websites such as The Foundation Center. CASIS does mention some financial information in its annual report but this is selective and incomplete and is certainly not the same as posting their 990 forms online - which they have told the IRS that they do. Other than the conflict if interest policy, I cannot find CASIS governing documents anywhere on its website or via Google.