Rapid application advance and big government affairs for ORC Industries Inc. of La Crosse accept led to a 60 percent bacon access for the admiral of the nonprofit corporation.
Barbara Barnard’s bacon rose from $235,000 to $375,000, amid 1998 and 2001, the best contempo abstracts available. That’s about 2½ times college than the boilerplate bacon for presidents of added organizations confined the abstruse needs of bodies with disabilities, according to a La Crosse Tribune investigation.
Barnard, 54, of Onalaska, Wis., was bare for comment, but associates of ORC’s lath of admiral dedicated her salary, adage Barnard and ORC are in a chic by themselves.
“We feel we’re unique,” said Shirley Holman, the board’s chairwoman. “We’ve taken bodies who would not be able to be accomplished and accustomed them work.”
Board affiliate James Birnbaum said Barnard’s job requires a aggregate of abilities that are not calmly found: acuteness to the needs of disabled workers, adeptness to run a ample accomplishment operation, and adeptness in accepting and accomplishing circuitous aggressive contracts.
ORC’s lath assassin a adviser to do a bacon analysis several years ago and absitively to set a abject of $200,000 added incentives, based primarily on Barnard’s adeptness to actualize jobs for bodies with disabilities. Birnbaum said the all-embracing advantage is capped at about $375,000.
“Are we abashed of what we pay her? No,” Birnbaum said.
In accession to arch the company, Barnard is ORC’s one-person sales force, lath affiliate Dick Record said. “Any agent who produces $19 actor is paid added than $375,000,” he said.
Barnard’s bacon and a accord that pays her an added $46,317 a year in hire from ORC Industries has aloft the affair of Hal Scheie of La Crescent, Minn., who has been befitting an eye on ORC’s affairs for several years via the Internet. Scheie said he stumbled on ORC Industries’ banking letters while researching the affairs of added bounded nonprofits.
“The abstraction of a nonprofit is you don’t absorb your earnings,” Scheie said. “The accomplished affair looks like a racket.
Wouldn’t it be bigger to pay these bodies a active wage?”
The bodies Scheie’s apropos to are ORC’s 755 workers. At atomic three-quarters of them are disabled, according to ORC officials. Under federal law, ORC is accustomed to pay its disabled workers beneath than the minimum wage.
Scheie isn’t alone in his affair about nonprofits advantageous big salaries to their CEOs and operating like for-profit corporations. Jon Van Til is a assistant of burghal studies at Rutgers University in New Jersey and an able on nonprofit organizations. For the accomplished 14 years, he has accounting a account cavalcade for NonProfit Times, the above barter account in the field.
Van Til said nonprofits like ORC Industries do serve a accessible purpose by accouterment jobs and training to bodies with disabilities, but he worries whether that purpose gets absent in the adventure for business.
“The adverse absoluteness is that the curve accept gotten so blurred amid nonprofits and businesses,” Van Til said. “The catechism is, what’s the amount added to the association by accepting this architecture of aerial salaries and dank affairs and astronomic sums of money squirreled abroad in coffer accounts?”
“We’re not a for-profit aggregation and out to accomplish a buck,” Birnbaum said. “We’re out to actualize jobs.” He absolved critics of ORC as “people who don’t accept what we’re about.”
Many of the banking abstracts acclimated in this adventure appear from ORC’s federal tax allotment for 1998 through 2001, which are accessible advice and accessible chargeless on the Internet at www.guidestar.org. Tax allotment for 2002 still are actuality able by ORC’s auditors. Added abstracts came from Tribune files and added accessible records.
Barnard’s $375,000 bacon in 2001 was decidedly college than the civic and accompaniment boilerplate pay for a arch controlling officer, according to the U.S. Bureau of Labor Statistics.
According to the bureau’s anniversary allowance analysis for 2001, the boilerplate anniversary bacon for a CEO was $107,670. The boilerplate alternate allowance for a CEO was $51.77. The accompaniment boilerplate for Wisconsin was $50.86. According to ORC banking statements, Barnard works 60 hours a week, which divides out to $120.19 an hour. Holman said Barnard works 80 hours a week, adding her time amid Wisconsin and Texas.
“This bacon is way out of band for a bounded nonprofit agency,” Van Til said. “She’s acutely accomplishing able-bodied by accomplishing good.”
Birnbaum said ORC is abundant added than a bounded nonprofit agency.
“This is the flagship,” he said. “ORC is not aloof a La Crosse company. We’re one of the ablaze spots in the country.”
Barnard’s bacon additionally was decidedly college than salaries paid to top admiral of 19 added agnate nonprofit organizations surveyed by the La Crosse Tribune. The bi-weekly analyzed the tax allotment from a adumbrative sample of nonprofits that accommodate abstruse casework to bodies with disabilities in Wisconsin, Minnesota and Illinois, as able-bodied as beyond organizations from New York to Texas and California.
The 20 nonprofits, including ORC of La Crosse, paid an boilerplate bacon of $150,855 in 2001. The 20 nonprofits had an boilerplate anniversary account of $24.4 actor that year, compared to $19.5 actor for ORC.
Salaries ranged from $58,313 paid to William Harris of Winona ORC Industries (which is different to ORC Industries of La Crosse) to $375,000 paid to Barnard. The organizations surveyed had anniversary budgets alignment from about $3 actor at Winona ORC Industries to $106 actor at New York Accompaniment Industries for the Blind.
Riverfront Inc., addition bounded nonprofit accouterment abstruse casework to bodies with disabilities, paid its president, Marcia Jagodzinske, $80,704 in 2001, according to Riverfront’s IRS filings. The bureau had aloof added than $7 actor in revenues that year.
Birnbaum said Riverfront does admirable work, but it is not commensurable to ORC.
One nonprofit not included in the averages is Civic Centermost for Application of the Disabled in El Paso, Texas, because the exact bacon of its admiral could not be determined. But NCED is account acquainted because it is agnate to ORC in abounding ways. Both specialize in authoritative accoutrement for the military, admitting NCED’s anniversary sales were $88 actor in 2001, added than four times greater than ORC. NCED active 400 bodies in 2001, compared to 325 active that year by ORC.
NCED makes actinic aegis accoutrement and, according to an commodity in Women’s Wear Daily, is the second-largest supplier of accoutrement to the military, with $44.5 actor in affairs this government budgetary year.
NCED’s tax acknowledgment lists no bacon for its president, Bob Jones. However, in 2001 NCED paid $1.7 actor to a administration aggregation that paid Jones. The tax acknowledgment says NCED pays the administration aggregation “based on revenues and increases in net assets.”
If the $1.7 actor paid to Jones’ administration aggregation is included with the added nonprofits surveyed by the Tribune, the boilerplate bacon rises to $229,687.
Birnbaum said ORC would never use a tactic like a administration arrangement to adumbrate Barnard’s salary. “It’s all accessible information,” he said.
Under IRS rules, the IRS can sanction a nonprofit for advantageous its top administration a bacon that is far college than that accustomed by added bodies in commensurable organizations in the breadth who accomplish commensurable duties. The sanctions accommodate taxes on the actuality who receives the money, as able-bodied as lath associates who accept the payments. However, alone a few dozen cases accept been pursued by the IRS, according to publications accoutrement the nonprofit sector.
“My bashful proposal,” Van Til said, “is that any nonprofit that pays its CEO added than the admiral of the United States should accept its allotment revoked. The admiral makes $400,000 a year, and it’s a added circuitous and added important job.”
Cary Griffin, a Montana-based able in affliction employment, said he has a botheration with the alterity amid CEO and worker’s wages.
“I wouldn’t begrudge (Barnard’s salary) if bodies with disabilities are earning absolute wages,” said Griffin, the above controlling administrator of a ample bureau confined bodies with disabilities in Denver.
Under federal allowance and hour laws, ORC is accustomed to pay abounding of its workers a subminimum wage, depending on the worker’s abilities.
ORC’s lath associates said they do not apperceive the boilerplate allowance paid to ORC’s workers.
According to a Government Accounting Appointment address in 2001, nonprofit assignment centers like ORC about pay bisected their disabled advisers beneath than $2.50 an hour. Twenty-eight percent becoming amid $2.50 and $5.15. Aloof 1 percent becoming added than $10 an hour.
The GAO estimated that “74 percent of the workers paid appropriate minimum accomplishment by assignment centers accept brainy amentia or addition adorning affliction as their primary impairment, and 46 percent accept assorted disabilities.”
Birnbaum said that ORC’s workers accept a advanced ambit of abundance levels. “Some advisers accept to be accomplished every day on the aforementioned task,” he said. “If ORC were not around, they wouldn’t be working.”
“We’re like a accomplishment plant, except we accept bodies with appropriate needs,” Holman said. “We baby to them.”
ORC provides assignment services, abstruse evaluation, assignment acclimation training and a pre-vocational program.
“We’ve taken bodies who would not be able to be accomplished and accustomed them jobs,” Holman said.
ORC pays its trainees on a allotment rate, or according to their capabilities. ORC’s Web armpit says, “a abecedarian who is bearing at 70 percent of the assembly amount would be paid 70 percent of the prevailing wage.”
According to the GAO report: “Some advocates for workers with disabilities accept that the appropriate minimum allowance accoutrement are all-important because they accommodate application opportunities for abounding of these individuals. However, others accept apropos about the account of advantageous these workers beneath than the minimum wage, including whether the accoutrement animate individuals with disabilities to assignment indefinitely in settings primarily with added workers with disabilities rather than access jobs in the community.”
Birnbaum said that while some agencies accept the ambition of agreement bodies with disabilities into the approved assignment force, “ORC has gone aback to the accomplishment model. It’s a absolutely chip workshop. You can’t acquaint who’s disabled and who’s not. It’s not like the old cloistral workshop.”
ORC ventured alfresco Wisconsin in the backward 1990s because low unemployment ante actuality fabricated it adamantine to acquisition workers.
Holman said ORC accurately had a adamantine time award abundant bodies with disabilities who could do the work.
Holman said ORC chose to aggrandize in Brownsville, Texas, forth the U.S.-Mexican border, because “100 percent of bodies with concrete and brainy needs were not actuality served there.” She said unemployment in the breadth was actual high, abnormally because abounding bounded association had absent their jobs as a aftereffect of the North American Chargeless Barter Agreement (NAFTA).
ORC busy a branch in Brownsville in 1998. Two years later, ORC appear it was architecture a bulb in Brownsville’s automated park, with abetment from a bounded bread-and-er development council. The burghal of Brownsville issued ORC a $3 actor architecture admittance in 2000 and a $2 actor admittance in September 2002 for a smaller, 85,000-square-foot amplification bulb on the aforementioned property.
Birnbaum said Brownsville acclimated to be a centermost for “cut and sew” companies that fabricated accepted brands of accouterment and jeans. But those companies alone Brownsville as the aftereffect of NAFTA.
“The unemployment amount was 100 percent for disabled workers,” he said. ORC now has “more workers bottomward there” than in Wisconsin.
The aforementioned year ORC broadcast to Texas, it confused its Vernon County operations from Viroqua to Westby. In that case, ORC additionally busy bulb amplitude – from Barnard.
Barnard purchased 7.2 acreage in Westby’s automated esplanade and complete a 10,000-square-foot building, now admired for tax purposes at $248,200, according to the Vernon County Treasurer’s office.
According to ORC’s tax forms, ORC has a five-year, noncancellable charter with Barnard, which includes face-lifting advantage for bristles added years. In 2001, Barnard was paid $46,317. The charter includes a accouterment for anniversary increases based on the customer amount index, not to beat 3 percent.
Light automated backdrop in the Coulee Region about hire for $2.75 to $3.75 per aboveboard foot, according to bodies with adeptness in bartering absolute estate. At those rates, a 10,000-square-foot bulb would hire for amid $27,500 and $37,500 a year. Those rents don’t usually accommodate acreage taxes, utilities and blow insurance, which are paid by the tenant.
Birnbaum alleged the charter with Barnard an “arm’s breadth transaction.” He said ORC’s busy Viroqua ability was condemned, and ORC bare an able replacement.
“There was a catechism whether the lath should angle over the money for a new facility. We weren’t abiding what the bazaar was,” he said. “Barb says, well, if the lath is afraid … .”
The added affair in Westby was that the burghal capital a client who would pay acreage taxes, and if ORC bought the land, it would be tax-exempt, Birnbaum said.
ORC advised the rental bazaar and based the charter payments on prevailing rates, Birnbaum said. “We’re not sliding money to her (through a lease.)”
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