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Multiple Execs At Small Charlotte Nonprofit Earning $300K +

http://66.225.205.104/JR20110715.mp3

Running a nonprofit doesn't have to be a low-paying gig. A handful of nonprofit executives in Charlotte routinely pull in salaries of $300,000 or more. They include executives of the Duke Endowment, the Foundation for the Carolinas and the Charlotte Chamber. But one nonprofit stands out because it's the only one with two executives in the Top Ten, and you've likely never heard of it. The fact that you've probably never heard of Developmental Disabilities Resources, Inc. is actually a big reason its executive director thinks she deserves her $310,000 salary. Her name is Gina Lemons. "We're a business," says Lemons. "We don't solicit funds. We don't have change jars at the Food Lion. We don't ask for donations, we never have. So we're, I mean, we're not a typical nonprofit." Developmental Disabilities Resources, Inc. - or DDR for short - is a nonprofit according to the state of North Carolina and the IRS, but it holds that distinction reluctantly. Lemons, runs it like a business and pays herself like a for-profit CEO. She pays her mom even more, and her father does well, too. Lemons asked that we meet at a breakfast diner a few miles from her nonprofit's humble office space on Albemarle Road. This was the only way we could get an hour uninterrupted by the demands of her job, she said. "We have a lot of families that depend on us," says Lemons. "We are on call 24-7, 365 days a year for whatever issue." Lemons oversees about 30 employees. They, in turn, manage some 1,500 contract workers who are mentors and caregivers to people with intellectual and developmental disabilities. Medicaid and county governments pay for the services. Last year that amounted to $12.3 million for DDR. Gina Lemons took home 2.5 percent of it in compensation. But the most highly paid employee at DDR is actually her mother Jean Kennedy who handles provider services for a salary of $318,000. Lemons' father, Jimmy Kennedy is an associate director with the third highest salary - $185,000. On top of that, Lemons owns the office building which DDR rents. She and her mother also own a company that leases office equipment to the nonprofit. All told, the trio took home just over $1 million from DDR last year. An arrangement like that leads Trisha Lester of the North Carolina Center for Nonprofits to wonder "Why did you set it up as a nonprofit? Why didn't you just set it up as a corporation if what you wanted was to have a family business?" Lester is not familiar with DDR and has no comment on the nonprofit, but she has a lot to say about the best practices nonprofits should embrace. For example, nonprofit boards: DDR's consists of just Gina Lemons and her mother. "Board members should be composed of individuals who are not related by blood, marriage or domestic partnership," says Lester. A board of just two people is not a best practice either. "Not at all," says Lester. "That's only two perspectives and you can't have appropriate deliberation about issues." Such as what the executive director should be paid. A nonprofit could lose its tax exempt status if the IRS determines executives are getting exorbitant pay. Lemons says her attorney and accountant have assured her $310,000 is reasonable. But salary data from the North Carolina Center for Nonprofits suggests executive directors at similar-size organizations are being paid $150,000 on average, and no more than $215,000. Lemons maintains that's not a good comparison because DDR's direct competitors are for-profit corporations that don't publicly disclose their salaries. "If I could switch the existing DDR to a for-profit, then you and I wouldn't be speaking, you wouldn't even know what I made," says Lemons. "But we have to protect the resources that the nonprofit has." If DDR were to become a for-profit corporation, it would lose its tax-exempt status and potentially take a hit on millions in assets. Lemons says the only reason DDR is a nonprofit is because that was a requirement to bid for a lucrative country contract 12 years ago when they got started. So DDR operates by the minimum legal requirements for a nonprofit. In the disability services community, DDR has an excellent reputation and its record with the state backs that up. But what do the nonprofit's clients think about the top-dollar salaries of its executives? "I don't really care," says Africa Heath, with a laugh. "It doesn't really bother me." Heath is very happy with the service her 14-year-old son gets from DDR in coping with his cerebral palsy. She actually switched to DDR from one of its for-profit competitors a few years ago. "It's the atmosphere at that company is very good," says Heath. "When you walk in, it's like family." Of course, the people making the most there are family. And while DDR's governance is not considered ideal or ethical by nonprofit standards, Lemons says what matters is what her clients think.