InsIde non-profIts
Coping With Comp
State governors retaliate against unreasonable
remuneration at tax-exempt organizations. BY BRUCE D. COLLINS
Your child just began classes at San Diego State. You read in the paper the board of trustees just
increased the school president’s salary by $100,000 (to $400,000). And, during the same meeting
they increased student tuition by 12 percent. As you write your congressman you grumble, “There
oughta be a law!” ¶ You can save your breath because there already is a law limiting unreasonable
compensation in tax-exempt organizations, including colleges and universities. The problem is
that the law doesn’t matter. The Internal Revenue Service (IRS) can’t seem to conclude that even
million-dollar compensation packages for
school executives are unlawfully unrea-
sonable. The agency put on a good show
back in 2008 when it embarked on a col-
lege/university compliance initiative,
during which it sent detailed question-
naires to 400 public and private schools.
The IRS then sent examiners to 35 schools
for on-site audits looking at things such as
unrelated business income and executive
compensation. A ton of money was spent
by the schools in answering the question-
naires, and more was spent by the schools
and the government during the audits.
BRUCE;D.;COLLINS;is corporate vice president and general counsel of C-SPAN,
based in Washington, D.C. E-mail him
at collins@c-span.org.
