If you're not willing to pay for that ability, and you can't find someone with that ability who is already independently wealthy and willing to work their butt off for no compensation, then you're going to end up with someone who is absolutely not qualified, which in my opinion, amounts to saying that you don't believe charities should be large or efficient, which I suppose is a valid opinion, but doesn't seem like a better use of resources than paying a competent manager.

I find that there's always someone willing to clamor that CEO's are with their weight in gold, but I find it excruciatingly difficult to find an elucidation of how what a CEO does is dependent on a particular person rather than to an arbitrary individual making a decision based off of high level information collected about the state of the company.

I'm really curious, because it bugs me that everywhere I go I never seem to be able to jive this view of CEO's as unique in their own right, with the fact that what they are doing is just enabled by carte blanche access to the internal state and business affairs of the company in question.

I also think if you can replace a given manager with anyone and the right information, then that manager is as worthless as you think they are. While that may be true of many managers, it's not at all true of good ones. I think there's the daily work of the business, and there's the managing of the daily work of the business, and while the skill-sets often overlap, they are not the same, especially as the business grows.

On the other hand, I find it hard to justify many (most?) of the highest end CEO salaries, but generally a competent manager at a company doing just several million dollars worth of business per year is worth at least several hundred thousand dollars per year (roughly how much someone who owns and runs a business with that much revenue would make).

At the end of the day, I'm going to have to take the cop out though and say that if you've never met a manager that can't be replaced by just anyone with the right information, you haven't met a good manager, because I definitely know at least a few people who can step into many roles, whether it's running a business, or coaching a youth sports team, or helping a local non-profit, where everything starts running better once they start providing direction and it's not because there was no one providing direction previously.

I think most people on HN would say no I can't be replaced like that, I think I can't easily be replaced in the job I'm currently on. Not saying it's impossible just saying it is difficult, which is why they pay a lot of money for me.

I've worked non-technical jobs in construction and the like, and unless it was the stupidest low-level stuff you couldn't really pull anyone off the street and tell them well here's the job have at it.

But for some reason there does seem to be some people who think management can be replaced like that. It seems unlikely to me.

Now of course this calculation changes if the person being replaced is no good at the job, then yes when I worked construction you could probably have replaced me with some idiot off the street. And I suppose there are bad managers and CEOs that can be replaced the same way.

As for why they are worth their weight in gold, it is because that is what the market will pay, just as I am worth what the market will pay for my skills and the best construction worker I ever knew was worth what the market would pay which was quite a bit less than the money I get paid which is in turn less than a CEO gets paid for their skillset.

The ability to see where you suck and see your opportunities and above all, fight hard to fix it, is rare. It is much more than making a decision based off of information collected by advisors - it is vision and wisdom and political sense and grit. This is no less true when the particular mission is reducing suffering than when it is making money. Solving hard problems is always hard, and there are never enough people around who can make it happen.

Keep in mind that HN has a disproportionately high number of owners of startups compared to most Internet communities. You'll see a lot more CEO worship on this site than reddit or any other site.

Personally, I don't know. It does seem to be a lot of 'who you know' over 'what you know' at that level. Some special knowledge, but nothing that couldn't be taught with a 4 year degree. But it would be foolish of me to think I fully understand all that is needed. So I'm left wondering which is the case.

1. They are somehow superhumanly increasing the company's bottom line

2. They target companies with enormous amounts of money and intentionally influence their salary to become very large, independent of their job performance

Insofar as #2 is possible, that seems the most plausible explanation for large CEO salaries. Unless the people determining the CEO's salary are somehow completely firewalled off from his influence, it is hard to see how #2 is not possible.

With consistent good management, mature organization should hope to see incremental growth. Bad management can destroy a company overnight.

Like, really?

CEO's making market-wages (100k+) "working for charity" frustrates me. At that wage, they aren't charity workers at all. Every dollar they accept is someone remaining underfed, while the CEO gets resume-flair.

Protip: Charity's do not need a CEO in the sense that a company pushing a product to market needs a CEO to manage various business units. They need someone who cares about the net impact to the impoverished at reasonable expense to themselves.

I'm not saying there isn't any excessive pay in some charities. But the management needs of an organization are not determined by the goods or services being supplied by that organization so much as by the complexity of the organization. It's not somehow fundamentally easier to manage a charity than it is a product company of similar scale and size.

Now, there can be unwarranted complexity of course, but some of this is a natural outgrowth of scaling and reach. So just like in private sector, charity organizations have a huge range of needs. Running MSF is very different than running a local independent food bank.

From my limited personal experience, charity sector executives tend to be paid a fair bit less than they would in private sector work, but still at a reasonable scale for experience an skills.

This is exactly what you want: someone capable of doing the work well, who demonstrably cares enough about it that it as made a financial impact on them. Otherwise you are effectively suggesting that it is better for the organization to be inefficient and waste its donations, so long as the people heading it are also "donating" their time. You can hope for somebody good who is financially secure and doesn't need the salary, but it would be foolish to count on.

There is one other issue, which is the question of whether or not larger scale charity organizations are (or can be) more efficient at delivering meaningful impact than smaller, localized one. That seems like a good target for some proper research. If the answer is that larger organizations are better at it, then clearly there is a benefit to having them run well. And caring about the impact is nowhere near enough qualification to do that.

This is empirically false.

Companies fail far more frequently than similar charities do. The core reason for this is companies operate on a much smaller margins. A charity that distributed 90% of it’s donations last year could distribute 80% if it’s donations this year if they collect half as much. Combined with often significant endowments and failure is rarely a major concern. Companies on the other hand are almost never in those situations.

There are certainly issues with inefficiency in charities stemming from the fact they don't have the same market pressures on them as private sector companies do (or at least, not as much). However, this doesn't have anything to do with the difficultly of managing complexity in large organizations.

Or were you objecting to the hand-waving about efficiency? I agree measuring impact of charities are difficult but what else would you look at? Executive pay rate is obviously a silly one without extra context. Year-over-year changes are good, but I at least alluded to that.

I guess I don't know quite what you are objecting to.

While it is true for the reasons you mention that a badly managed charity may last much longer than a badly managed company, that has no impact at all on my statement. It is not somehow easier to manage the charity, it is just less immediate that the negative consequences impact you.

But note, I'm not suggesting we support badly managed charities. I'm saying that to manage it well requires similar skill to that of a similarly scaled private sector company, and you will have to pay for those skills.

This is entirely separable from the issue of evaluating whether or not it is being effectively managed.

Compare the rate of companies that existed 5 or 50 years ago and don’t exist now vs the rate of midsized or larger charities that existed 5 or 50 years ago and don’t exist today. If they where equal you could argue running them was equally difficult. However, because utter failure is not equally likely clearly it’s not equally difficult.

You can use other metrics like the rate CEO’s are replaced and they also show it’s just a much easier job.

So, if the org is more likely to survive and you’re not as likely to be fired that’s clearly an obvious threshold for success at the job. Unless you’re going to suggest only more capable people run charities or something.

PS: I then tried to suggest why this was the case, but that’s not central to the argument.

However, I do think there is an aspect of complexity that is inherent in scaling and reach which is just unavoidable. If you operate in multiple countries/jurisdictions. If you have multiple locations & plants. If you have distinct branches with different goals. If you operate in multiple languages. etc. etc. These things are inherent complexities, and as you get bigger, they are harder to manage well.

I see what you are getting at, but I don't think failure rate is a particularly useful comparison, for two reasons. (1) (as noted before) charities can survive mismanagement for longer, typically. (2) Lots of organizations have a sort of "useful lifetime", not everything is going to become a multigenerational organization, and that's fine. I would argue that due to types of mission, charities skew longer here (e.g. the work is often unlikely to ever go away) than corporations.

Fundamentally what I was objecting to was the idea that charities are somehow inherently easy to run, so they should do fine with people who either aren't skilled or are incredibly self-sacrificing (you'll mostly find the former). That's just crazy to me.

So I don't think anything you've brought up invalidates what I said; it just points out an orthogonal problem - that it is harder to evaluate "good management" in the context of charities. Not that it wasn't already hard to evaluate.

Examples include that charity CEOs aren't required to have the same skills as private CEOs, companies failing at larger rates, companies having smaller margins, etc. You're making easily falsifiable claims without backing up your assertions.

Just based on the fact that it's pretty easy to start a business compared to a charity I'd say the average soil requirement for a functioning charity is as high if not higher than a private entity since you can sell your services to make more money, you typically don't have the income incentive to a large portion of the population, you have an unstable workforce of non-paid resources, and unlike an established business you're in constant fundraising mode. I'd say it's more akin to operating mode of an established company with the income model of a startup.

On top of this you need someone willing to spend either time or money to hire a professional to navigate the legal system. It's not a easy as just trying to be good. Our church for example can't be used as a warming center in the winter due to liveability requirements, we had to work with our local city government who has a full time paid grant writer to get funding to cover just the building resources and we volunteer the staffing for the center.

Then there's logistics. Any professional organization needs to know what it has and in what quantity to be able to effectively distribute those resources. That requires software, logistics expertise, and sometimes physical hardware. All of these are professional roles in a company of any real size.

I think you may be understating the difficulty of the task compared to private enterprise. This is why I'm asking for references, I did a cursory look and didn't find anything directly for what you stated, perhaps you're aware of some information resources I'm not?

It's a tough question as they may just be redirecting money away from charities with less marketing spend.

It depends on the overall efficiency, doesn't it?

I'm not saying this stuff is easy to evaluate. I'm saying there are vastly more important qualifications than "I care about this work", and if we have decided large charities are effective then clearly we want competent people running them.

I'm perfectly ok with the answer being: "no, the best bet is very small, very local, entirely volunteer organizations".

The worst case to me seems to be poorly managed large organizations, which will then just bleed resources at every level.

On the other hand a small non-profit with a half a dozen employees probably has greater need of a competent accountant.

They've already taken a 75% paycut, at a certain point you're not going to attract the talent necessary to do great work. The difference between an A-player and a C-player is vast, and sometimes you need to compensate higher to attract the A-players that will have a transformative impact on the charity.

Another example was the guy that built a successful baseball team from low paid players (what was the book called?) which showed low pay did not mean low performance in a discipline where outcomes could be measured (much easier than CEO, so you would expect better correlation of pay with performance for sports).

Edit: Moneyball (baseball is as foreign to me as rugby is to Americans?).

You're comparing executive pay, which isn't based on verifiable public data. It's not the same thing.

While your assertion that pay doesn't correlate to performance is correct that's based on the idea that the wrong tools and metrics are being used to measure CEO performance. At a certain point you're not going to attract talented people for the task with 25% of the pay unless they've already made their money. There aren't a lot of those types of executives with this experience available unfortunately.

My experience with non-profits (granted, not 'pro' since I wasn't being paid) is that organizations that limit their capacity to amateurs and volunteers also significantly limit their impact.

I think in many cases the right candidate for a non profit is someone who cares deeply enough to take a pay cut to work there.

1. Someone making $100k who is able to bring in and distribute $3m in donations per year

2. Someone making $300k who is able to bring in and distribute $5m in donations per year

There's real value to having someone who knows what they're doing in the top position, and that won't always be the person willing to take a pay cut.

  >  someone who cares deeply enough to take a pay cut to work there. 

Are there bad methods with good missions? Yes. Are there bad missions with good methods? Yes (most for-profit companies fit here).

Furthermore, CEO salary is one of the most dismal metrics. UNICEF USA's CEO is often in chain-letter-type posts about CEO salary, yet UNICEF USA raises gobs of money for highly successful programs saving millions of lives per year in developing countries. UNICEF vaccinates somewhere near half of the worlds children. Half.

Somehow, hiring talent seems over-rated. This seems related to "efficiency" which is % of dollar going to "programming". Fine salaries paid to employees is cash they cannot hand out to homeless. I get it.

It's usually not those trade-offs that reduce "efficiency". There's a ton misunderstanding about what "programming" is. If a company installs a landing strip to fly in 10 years of supplies, have they spent that money on "programming" or "overhead"?

The worst offenders, in my opinion, are the tiniest hobby non-profits that do virtually nothing. If I fly to the third world and install a well for some people, have I done real good? Perhaps! If I hand out food once a year around thanksgiving, have I? yes! But that labor, effort, and money may have been better invested in policy changes or continuing-support programs. In almost all cases I've seen, the tiny non-profits bemoan the cost of doing this compared to the larger non-profits. Why are some programs more expensive when implemented at a larger non-profit? The main reason is they include this "extra" work such as publicity, policy, continuing support, and yes, hiring good people so they can do better next year with more money.

Any business-minded person will tell you that you must reinvest in your organization to do more. What that more is might be up for debate (the mission), but to avoid self-investment is to have a bad method.

Neither does the work of the people donating food and/or money.

Precisely. And they don't like the idea that some middle man is profiting off of what they're giving. It's really that simple. Tell me my money goes to some administrator who's organizing a bunch of volunteers to distribute donations and I'm wondering why the hell that guy isn't a volunteer.

You can donate $20 to a non-profit, but you can't donate "a few hours of CEO work" the same way, it just doesn't work. So it's more of an "all or nothing" kind of position.

Expecting someone to donate $20 of their salary or a few days of their time? That's not a big deal. Expecting someone to donate 100% of their salary or 100% of their "work time" for a year or more? That's a HUGE ask.

It's no surprise there aren't any takers.

> all sorts of folk

Even if we did take your statement as a datapoint (hopefully one among many...), this clause could cover a small town or an entire continent.

It's amazing that in a community of Y-Combinator founders, there is such a malformed understanding of what it means to run a large organization.

Don't get me wrong, CEOs have inflated salaries. That is a society-wide problem, not just non-profits. To argue that non-profits should just forcibly change the bar for CEO salary (1) is the wrong place to enact this kind of social change, (2) would ensure that you only get the least qualifying candidates, (3) could lead CEOs into possibly devious action to increase personal wealth, and (4) could result in lower effort/efficiency as the CEO has to juggle other financial-fitness activities.

If CEO salary is important to you, there is tons of data out there to help you pick a similar charity with more agreeable administrative compensation. I hope that there aren't people out there who just don't donate because of this.

Not all of us have any relationship to Y-Combinator and/or the companies incubated by Y-Combinator (beyond perhaps using this site). I sure as hell don't.

> I hope that there aren't people out there who just don't donate because of this.

Sorry to shatter your hopes, but this is the exact reason why I'm averse to supporting the Susan G. Komen foundation in any way (well, that and them suing other charity organizations for running fundraisers that sound vaguely like "for the cure"; also, for continuing to shovel money into "awareness" instead of actual research).

If for-profit organizations find it beneficial to grow and expand using dedicated administrative staff, the assumption is that there would be benefits to growing a non-profit organization to a similar level. And while I'm sure there are ways to make it work, if we want them to run as well as for-profit companies are run, it stands to reason that dedicated administrative staff would provide greater returns to the organization (and their cause) over the cost of employing them.

If growing like that is an overall good thing is up for debate, but the idea that growing an organization requires dedicated and competent staff isn't really that shocking to me.

Sure you can, by volunteering on the board of directors of said charity. Like my wife does, helping organize a charity large enough that it runs a free hospital, a dental clinic and home for otherwise homeless people in a major US city.

In my own experience, the amount of work done by said trustees/directors of a larger charity is negligable compared to the amount of work done by manager-doers who are volunteering for them.

By negligable, I'd like to quantify: Based on estimates relating to a charity I've been involved with, about 1:300 individual trustee hours to invidual working manager hours.

With those kinds of ratios, the trustees/directors are not really doing the management. They are more like a consultation committee, who sign off on big things or take responsibility for major official decisions from time to time.

What's meant by democratising management is getting rid of the working managers, and leaving all of that work to a democratic group - ie the trustees, or the volunteer labour force as a larger democracy.

Non-profits vary greatly, so I wouldn't like to presume how much work your wife does, but in charities operating with numbers like I've just described, handing over the work done by the working managers to either the trustees (who have 1/300th the time available), or the volunteer labour force (who mean well but are not doing it professionally, and probably not full time), would usually result in the charity disastrously failing to deliver on its mission.

(I have worked for a different non-profit, where time-consuming tensions between people who wanted things to be done more democratically (i.e. a lot more talking and reporting, and inappropriate privacy violations), and people actually putting in a lot of hours and barely keeping it running while providing enough deliverables to its sponsors, to retain critical things like a building to operate in, ultimately broke down, with neither the democracy-loving-but-doing-only-a-litte-work people happy, nor the sponsors, nor the people putting in hard volunteer work in the hope of its mission continuing, nor even the recipients of services (because it couldn't deliver the best under those circumstances). The service users were glad it existed, but they didn't know how much better it could have been. So, based on experience, I'm rather cautious about recommending democracy as an approach for new charitable social enterprises, if you need to deliver real, substantial services - it helps with some things, and causes tremendous, even surprising, problems with some others. I'd take more care structuring it, if doing it again.)

Not many people are going to be able to volunteer full-time. At some scale, someone has to work full-time to make the machine go.

high level decision making is not needed all day every day at most companies. Even the ones i've worked at that had thousands of employees, could operate with out a head being around 9-5. Particularly so if they were well managed.

> You are oblivious of the underlying business aspect that any nonprofit requires as they grow.

I disagree with the idea that growing should be part of a charitable organizations goals. It is not a business and should not act like one.

I realized you can't critique how they spend their money from outside.

The most important thing isn't how the money is used but the impact they have on their mission. If a CEO takes 98% of the money but the non-profit ends hunger, is that a problem?

If you want talent, it costs money to keep & retain it. A lot of non-profits had amazing young people working there but those people wanted to have families & move up in the world.

Non-profits that are 100% volunteer are usually less organized & less efficient. Most small non-profits that do pay employees pay very poorly & can't keep great employees which hurts efficiency of their mission.

Sometimes really good opportunities come up for non-profits that could help their mission immensely but they have to turn them down because it would really look bad on their finances when people look at their administrative costs. There actually seem to be black markets out there of non-profits trying to move money around to achieve missions around without hurting their administrative cost to money spent directly on mission ratio.

People need to quit handicapping non-profits. Solving problems cost money & non-profits often spend more time managing accounting than thinking about the problem they're trying to solve.

That's not at all what's happening, though.

But if growth furthers the mission of the charity, which it may well do depending on that mission, then absolutely it should at least consider it.

From the outside as a donor/supporter of that charity and mission, the logical thing for me to care about is how efficiently they can deliver, and are they getting better or worse at that. Which is why you have charity efficiency ratings. Those are hardly perfect, but that's what is important, not some limited information opinions on salary.

If they are doing a good job at it, they are demonstrably in a better position to judge how than you or I am; or almost anyone outside their area.

If a charity today is serving 1000 people well (say by providing food security), is it not better if they aspire to serve 1200 people next year?

That’s what “growing a charity” looks like: helping more people.

You may find the Econtalk podcast interviewing Dan Pallota interesting. He is a high paid charity consultant (450k) and defends his work and salary.

http://www.econtalk.org/pallotta-on-charity-and-the-culture-...

>I disagree with the idea that growing should be part of a charitable organizations goals.

Why not? What's wrong with maximizing the amount of good an organization can do?

> It is not a business and should not act like one.

It is a business, non profits register with the govt and must have a form of liability, especially with volunteer labor.

Hence just throwing canned food at strangers instead.

Guess what happened?

It was a nightmare.

Work times varied between 40 and 80 hours a week (I'm not exaggerating, there were day shifts and evening shifts and I often covered both). If someone else was off sick or on holiday, I often had to cover for them.

There were zero weeks off, because we were running all through the year.

Less involved people had nice things like holidays. But not muggins administrator here.

Just like a startup, in smaller non-profits you have to wear a lot of hats. There aren't enough people to specialise in all the things that need doing.

Even when there are plenty of people, most of them won't put in enough hours, and the quality of those hours is, how shall we say, "variable". It's a thing that comes up in volunteer organisations in particular.

Volunteers tend to think they're being generous when they put in, say, a 5 hour shift. And they are being generous. But unfortunately, because of the needs served by the organisation, a comfortable donation of time is often small compared with what's needed. Variable-time volunteers like to spend much of their time goofing off as well. Like it's sort of a job, and sort of a fun day out.

To rub it in, they tend to think the work done by someone else doesn't really need doing, or is done much slower than they would do themselves. Even though they have no idea what's really involved, and their eyes glaze over if you try to describe it all, and they don't believe you anyway. If you've worked in a software dev shop, you may recognise the type: A project that took 1000 person-hours to produce will be assessed by someone as "a couple of hours". Sometimes they're right, usually not.

So they "suggest" how to do it better, often in public forums, except you can't figure out any way to usefully apply their suggestion that doesn't create more work in the end, or infringe someone's data privacy, or fail to deliver what some sponsor expects for their money, or fails a legal requirement, or it's just plain nonsense, or etc. (longer rant available on request). People talk a lot of shit.

But you acknowledge you don't know everything, so you delegate to them a task, hoping they will build up responsibilities over time, without failing in your responsibilities in the process. (For example you can't just hand over a bunch of people's personal data, or a box of cash, or the keys to dangerous machine, to a keen volunteer-for-the-day just because they want to help.)

So you give them a useful but quite easy task, and they do a half-assed job of even that, and quit half way anyway ("I have to go home now, sorry man, I gotta leave the rest to you to finish off"). Then you're stuck staying late while the other volunteers have gone home, or have gone to the pub for a drink because they had enough fun contributing for the day.

Then people wonder why they don't see you at the social events, and think you're not really engaged with the organisation. Little do they know, and it doesn't register if you tell them anyway, that the reason you're not at the pub is because you're doing the damn record-keeping and box-moving and tool-operating that they're dimly aware exists, but somehow forget that it adds up.

The end result: Being a volunteer administrator at that scale and level of responsibility is very expensive for the poor fool who makes the initial commitment!

I went from good, comfortable savings, to struggling to pay houshold bills, because it wasn't possible to do enough paid work at the same time. It costs a lot of money to be a volunteer.

Naturally, some would "suggest" that paid work should take priority. But they didn't actually help make that possible; instead, the same people tended to add to the workload, by adding meetings instead of useful assistance. A few people offered assistance and were genuinely, awesomely, helpful. (Massive thank you - you probably know who you are.) A few others, though, offered "assistance" which was of negative help (i.e. created more net work), and seemed to be all about improving their social status instead (democratic organisations can suffer from this).

It's not actually possible to walk away from a high-responsibility volunteer position, while being responsible about it, since doing so risks seriously jeopardising the work of the organisation.

Imagine a charity could hire someone that would 100x the amount of donations, whether that’s through more effective marketing, connections, etc. how much should a charity be willing to pay for that?

The charity is about need. If it is also about that kind of growth, there is serious need.

We may be better served by a policy change so that charity remains at a lean scale.

But, there can be much better basics in place for people, and with those, a reduced need for charity to somehow perform at very large scale.

It can target, operate locally more, all good.

Disease, hunger, homelessness are all massive artifacts of long overdue policy reforms in the US.

I volunteer with and donate to a group - https://adrn.org/ - and that's what we do. When Hurricane Harvey hit, they (I was traveling) mobilized 150+ churches around central Texas to support the coast with food, supplies, and transportation immediately after it hit. Further, we've supported cleanup operations and helped get people back on their feet.

One of the things I've helped with directly is developer our playbook so other groups worldwide can learn from what we've done and build the infrastructure and relationships to prepare in advance.

By working with smaller organizations, the closest to the problem, you get great perspective but backed by larger teams who can coordinate across a city, region, or country.

It's business management + crisis response.

I'm a Christian who proudly supports our local church's food bank (no strings attached, walk in and take food) -- but I recognize that the Church can't do it alone.

People donate a ton of money to churches.

https://news.ycombinator.com/newsguidelines.html

"Nationwide, the mean salaries of chief executives at nonprofit hospitals rose 93% since 2005 to reach $3.1 million in 2015, according to an October 2018 study in Clinical Orthopaedics and Related Research."

https://www.wsj.com/articles/nonprofit-hospitals-criticized-...

The issue's core problem is the excessive pay of C-suite people in the US affecting the workforce. This bleeds quickly into charities, of course.

But I personally don't have much money. I would rather give my local church food to be distributed than money to organizations. It's not that the CEO doesn't deserve to be paid, it's that I don't want my money to go to him.