Tuesday, January 06, 2009

Limits on Exec Compensation in Grant Applications

337/365: The Big MoneyImage by DavidDMuir via FlickrNow, here's a clause in an RFP that I've never seen before. This is from an OJJDP Gang Prevention RFP that came out this past week. I guess if Wall Street had to give up their bonuses, nonprofit managers have to make sacrifices, too.

Limitation on Use of Award Funds for Employee Compensation; Waiver. No portion of any award of more than $250,000 made under this solicitation may be used to pay any portion of the total cash compensation (salary plus bonuses) of any employee of the award recipient whose total cash compensation exceeds 110 percent of the maximum annual salary payable to a member of the federal government’s Senior Executive Service (SES) at an agency with a Certified SES Performance Appraisal System for that year. (The salary table for SES employees is available at www.opm.gov.) This prohibition may be waived at the discretion of the Assistant Attorney General for the Office of Justice Programs. An applicant that wishes to request a waiver must include a detailed justification in the budget narrative of the application.

To save you time, here's the link to the Salary Table No. 2009-ES The maximum compensation for a Federal Sr. Executive Service with a "Certified SES Performance Appraisal System" is $177,000. So, if any of your executives are paid more than $194,700, don't charge any of that compensation to your proposal budget.

My clients are all wishing this was relevant to their compensation! Oh, well...

We'll probably see more of this. Do you think it will be applied to Federal contracts in the for-profit sector?

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Anonymous said...

Do any nonprofit execs get paid that much?

Ruth Wahtera said...

I think so, Justin. Most are in large, national organizations (Red Cross), famous museums (Smithsonian), opera companies (Metropolitan Opera), many nonprofit hospital execs, Foundation execs (Bill Clinton),nonprofit utility execs,for example.

The discussion about these salaries is mixed. Their organizations are just as complex as many for-profits. Their board is responsible for their compensation levels. But, of course, donors believe they are giving to help people or issues that they support.

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