So, the new CEO of the Gates Foundation, Jeff Raikes, is pulling down nearly a million dollars a year, according to a report by the Chronicle of Philanthropy. This is bound to get a few people huffing and puffing, not least because Raikes is already apparently sitting on a pile of several hundred million dollars that he earned at Microsoft.
Last week, world leaders at the G20 meeting were harrumphing about bankers’ bonuses. Should they be turning their guns on highly-paid philanthrocrats?
Absolutely not.
The tendency to judge nonprofit management by the scratchiness of their hair shirts (on the basis that paying decent salaries is a ‘waste’ of precious charitable donations that should be going to the beneficiaries) is widespread. Yet this is a dangerous canard. A cheap bad leader is much worse than a well-paid good one. Better pay could, with care, attract better leaders to the non-profit sector and enable valuable donations to be better used. The art, as in the for-profit world, should be to ensure that reward follows real talent and incentivises real achievement.
According to the sources quoted by the Chronicle, Raikes did not even want a salary (his predecessor and fellow Microsoft veteran Patti Stonesifer took no money) but the Foundation decided that paying the CEO was a point of principle. Although outside philanthropy, some wealthy bosses, from Larry Ellison of Oracle to Michael Bloomberg of New York City, are now working for an annual salary of $1, the Gates Foundation is right that this is a sensible principle to establish. It would be a mistake to make a career in philanthropy the exclusive preserve of those with private means.
There is of course one obligation that Raikes does have to meet – to give in his own right (our ‘good billionaire guide’ applies equally to those with just a few hundred million in the bank), which he seems to be doing.
He should also have to perform well to earn his money – something that, as Matthew wrote when he was appointed, may be hard to judge, given that his role seems to overlap with that of the increasingly active creator of the foundation. Raikes may be the only $1m-a-year CEO on the planet who is not actually in charge!