Ask Prof Wolff: Why Inequality Exists Within Some Nonprofits

A Patron of Economic Update asks: "Dear Professor Wolff, could you discuss 'economics' at not-for-profit academic hospitals? How do these hospitals afford the salaries of highly paid administrators (CEOs, Deans, Chairs, etc) who do not contribute to surplus labor (patient care)? Are some of these hospitals using 'nursing shortage' as an excuse to implement austere measures by loading more work on to fewer surplus laborers?"

This is Professor Richard Wolff's video response.

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“Marxism always was the critical shadow of capitalism. Their interactions changed them both. Now Marxism is once again stepping into the light as capitalism shakes from its own excesses and confronts decline.”

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[helengarrett]

I worked for several nonprofits. Believe me, they ALL underpay. I was never paid the going rate for the same job in private corporations. They made plenty of profit. They had different accounts, one for money that could be taxed, lIke advocating for political issues and another for money that could not be taxed, that were considered entirely charitable. Money flowed back and forth.

Everything Professor Wolff is saying about non-profit hospitals is exactly what happened in the non-profits I worked for. But given all of that, I chose to only work for non-profits rather than using my labor to further enrich already wealthy individuals or corporations. My reasoning was that at least my labor was going for social programs that actually help people. I took the hit in my incom and that, in turn, affected my Social Security income which is all I have to live on in old age, except for a $165.02/month pension. I live in poverty and qualify for Medicaid and SNAP. If Republicans take over the government in November and 2024 those vital programs upon which I depend will be in danger. You might have to look for me in a tent under a bridge or living somewhere in my 30 year old automobile because my affordable apartment would also be in danger. In this society the benefits that I qualify for, which are only obtainable if you live in poverty, are the only reward for having worked very hard for organizations that have social justice for their mission. I don't regret my choice but there is a better way to organize our society. A much more just way.

[TC-eoeb]

Prof Wolff often refers to profit as theft. He has a real disdain for someone "earning" profit. We all know Prof Wolff has a handsome retirement portfolio that is undoubtedly invested in the stock market. Today is 5/4/22 and the stock market is up 932 points today alone. Prof Wolff's retirement portfolio earned a nice profit today. How many here believe he donates his stock market profits to charity ?

[Armand]

I would like to see a similar video on tax exemption for religious institutions, which I think is outrageous.

[erinm]

The philosophers in this comment section miss the main point; should a skilled and educated worker have a decent life in the richest country in the world? Or should they scrape by two paychecks away from disaster while a select few amass billions? What if the majority have a dignified life while the rich amass millions, not billions and trillions?

[emhu]

I'm glad the hats are making a comeback.

[SamuelClemente]

I'm a Bernie Bro! My Trump supporters friends joke at me and call me SOCIALIST/COMMUNIST.

But last year. I bought a $100K rental property in Florida and He bought a $100K Dodge RAM! 🤷‍♂️🤷‍♂️🤷‍♂️🤷‍♂️ that's all I'm gonna say about that

[oliverkarp]

Prof. Wolf I’m not a hater at all, I admire you in many ways, but you personally own the copyrights of the work that you call a “collaboration” of your 501(c)3 and your director does not seem at a glance comparatively highly paid. No one needs to argue with me just confirm my point on Guidestar. Democracy at Work is a pretty standard operation in terms of how much it takes in, its control by a small group, its liberal use of volunteers, reliance on donors, sales of products... One reason why capitalism is safe is because given a chance proponents of socialism will behave as competitively and successfully on the free market to advance their own interests as anyone else also advancing their interests. Think of what it means that you have to be a Patreon sponsor to ask you a question. Doctor heal thy self!

[Bewefau]

Doctor's, hospitals and medicine should NEVER be for profit.

[gregoryparry]

"...even the not for profits are shaped by the model of a profit making enterprise." Great video Professor Wolff.

[dienekes]

Goodwill is a "not-for-profit" organization. The CEO (James Gibbons) -earned- (more like extorted) $718, 227 in 2017. Not For Profit, indeed.

[kathryntate]

My medical/dental care is with a coop, and it is first rate

[mctwain]

Thank you Dr. Wolff ! Very depressing breakdown. How do these .orgs suddenly change their phony non profit model to co-ops or shared profits model? This is the ultimate question .

You see the irony is the top get paid high salaries so they then end up in the bracket of high income and get that sweet taste of raw capitalism (greed) . in most cases equaling how to avoid taxes ! Most of them do this through real estate investments . therefore creating a vicious cycle that is unsustainable let alone housing crisis . This is the ultimate question how do we evolve to better systems that are more sustainable?
Do we crack some eggs to make and omelet ?

[GreatCharade]

I have to push back on some of the characterization of non-profit organizations. Certainly they do often exploit people who work for them and use the 'for the greater good' argument in doing so. It's shameful and absolutely shouldn't be the case. I'll even go so far as to suggest the non-profit model exacerbates the inequalities inherent in our healthcare system, the entirety of which needs to be overhauled However, they do not have a profit motive... The board does not OWN the non-profit. Most non-profits have a board consisting of volunteer community members. While many have CEOs, they aren't all paid at 275x the rate of their average employee. (locally a non-profit clinic here has a CEO making $200k, and there are many positions within the organization that earn MORE than he does). All of their information is public and transparent. In many non-profit healthcare institutions employees can join and contribute to committees, giving them at least some smaller amount of control over their work environment.

Could it be better as a co-op? Absolutely.... But I wouldn't say that it is all a 'hustle'. My experience comes from in depth knowledge of local non-profit clinics and their operation in my area. I am a health care provider in my professional life. While I'm not an expert in EVERY non-profit across the country, I can say that they shouldn't all be painted with such broad strokes.

[jeremyrangel]

....So then go start a worker co-op hospital, Dr. Wolff. What's stopping you?

[BBBarua]

Although it is very reasonable for people to have free time to enjoy their healthy years, a few people with a large amount of $ thinks that they are the only one entitled to those freedoms. So the rest of the ordinary people must keep on spending and working to feed these capitalists' freedoms.

[son-of-the-republic]

So tax’s are good ? What drivel

The professor is like the sheriff of naughtingham

[screenarts]

Non profit pays like a for profit company that's making huge profits.

[tanujSE]

These are common habits of religious economics, food becomes everything from where things comes(proletariat) while few rich man would fight to open NGOs to represent poverty and beggers, that one rich man who would provide food to begger by opening scam NGOs according will call himself burden man who have to handle such duty as duty is only one, having everyone just under control with mobile enjoying time with swimming pool babes

Wish good time with struggle to Professor Richard Wolff
Red salute

[yasminmata]

I want to know about the SALT tax please.

[penguinnh]

As the Board Chair of a non-profit I was disappointed in this broad-brushed explanation of non-profit vs profit making disparity in salaries.

Our organization is not stockholder based. Our board is elected by our membership and our board takes no compensation other than expenses incurred in doing their tasks.

Staff salaries are determined by market supply and demand and reviewed by an independent HR firm.

The salary of our Executive Director is determined by the board and is also determined by industry best practices and actual performance.

There are lots of rules that we have to follow to maintain our non-profit tax status, the benefit being that we do not have to pay taxes on the surplus revenue that we make (and we do plow that back into the corporation) but people and companies who believe in our mission can also take their donations off their income taxes.