New study from the Juvenile Diabetes Cure Alliance reveals that executive compensation in diabetes nonprofits, especially bonuses, is not tied to stated goal of finding a cure
NEW YORK – September 9, 2013 – A report released today by the Juvenile Diabetes Cure Alliance finds that none of the major diabetes charities link executive pay to cure progress, instead offering bonuses and incentives for meeting other goals such as fundraising.
By analyzing the compensation packages of CEOs and other executives at the JDRF, American Diabetes Association, Joslin Diabetes Center and Diabetes Research Institute Foundation, the JDCA found that the nonprofits are more likely to offer financial incentives for building their organizations rather than advancing a cure for type 1 diabetes. Some of the metrics used include increased fundraising, operational cost savings, effective staff utilization and successful awareness campaigns.
The JDCA research report concludes that linking executive pay to tangible cure progress could accelerate speed to a cure for type 1 diabetes.
“A number of executives are receiving performance-based bonuses that are not in any way tied to the organization’s stated goal of bringing about diabetes breakthroughs or developments,” said Pete Miselis, director of research for the JDCA.
All four diabetes charities offer incentives to at least some of their executives without indicating why these bonuses were conferred. The American Diabetes Association awarded its CEO almost $78,000 in bonuses and incentives, or 17 percent of his $446,000 base pay with referencing the accomplishment of achieving any specific goals or objectives. The JDRF paid bonuses to eight top staff members for “undisclosed” research related goals and Joslin awarded largest bonus payments to two ophthalmologists without communicating any specific rationale that justified the payout. Only the DRIF noted that bonuses were granted based on achieving fundraising objectives – but not objectives for cure progress.
“Material financial incentives can be a powerful force for charities align objectives across the organization and, ultimately, to greatly accelerate speed to a cure,” Phil Shaw, general manager of the JDCA, said. “The problem here isn’t the amount of executive pay; in fact, we encourage competitive compensation in order to attract top talent. The problem is that no one is being directly and specifically rewarded against concrete cure milestones.”
To download a copy of the report and explore more information on the major type 1 nonprofits, visit the JDCA’s website.
About the JDCA
The JDCA is an independent analyst of the type 1 diabetes charitable universe and brings a business-like perspective to help donors focus research toward a practical cure. The mission of the JDCA is to achieve a type 1 practical cure before 2025 by steering donor contributions to the most effective charities.