Top Campaign Minnesota officials get 6-figure bonuses

Geoffrey Ziezulewicz

Following the completion of its record-setting Campaign Minnesota fund-raising drive, the University of Minnesota Foundation paid several hundred thousand dollars in bonuses to its top administrators.

According to University records, foundation President and CEO Gerald Fischer received a $125,000 bonus for his work on Campaign Minnesota, in addition to a $62,500 annual bonus.

The Campaign Minnesota bonuses were for staying with the foundation during the seven-year initiative.

Fischer’s base salary is $250,000 for fiscal year 2004, which began in July.

Campaign director Judy Kirk received a performance and retention bonus of $101,000, half of her $202,000 base salary. She also received a $20,200 annual bonus.

The Minnesota Medical Foundation, the fund-raising arm that

focused on medical and public health fund raising during Campaign Minnesota, awarded medical foundation President Bradford Choate a performance incentive of $150,000 in addition to his $217,000 base salary for fiscal year 2004.

University spokeswoman Amy Phenix said the long-term incentive plan was approved in 1999, and the bonus money was paid out this last summer.

The University of Minnesota Foundation is an independent entity, said Linda Berg, campaign director for Campaign Minnesota. The bonuses came from revenue generated by the foundation, she said, not University funds. The foundation primarily generates revenue by charging a 0.75 percent management fee on the $785 million worth of endowments the foundation manages.

Roughly half the revenue generated by the foundation comes from this endowment fee, Berg said.

The rest of the incentive money came from the revenue of nondonor funds that were invested by the foundation. No investment was made with University or donor money, she said.

Thirty percent of the base salaries and fringe benefits of foundation administrators are paid by the University, she said. The foundation picks up the remaining 70 percent.

Don Wright, foundation member and former chairman of the foundation’s board of trustees, said the bonuses given to administrators who met their fund-raising goals are a standard practice in nonprofit fund raising.

It is not “extra money,” Wright said.

Such compensation and incentive packages are necessary to retain people. Other organizations could potentially raid the foundation’s talent, he said, so such incentives are needed to stay competitive and ensure loyalty.

Wright said a compensation component for completing a fund-raiser’s goals is a common tool for ensuring administrator loyalty and effort.

Tony Poderis, a fund-raising consultant from Cleveland, Ohio, said giving fund-raisers commission or bonuses based on the amount of money raised has negative consequences for a nonprofit institution.

“If any university is paying bonuses to their staff, they’re making a big mistake,” Poderis said.

When fund-raisers receive contingent pay, the charitable mission can become secondary to self-gain and donor trust can be damaged, according to an article Poderis wrote and posted on his Web site.

According to the Association of Fundraising Professionals’ Code of Ethics Principles and Standards of Professional Practice, which is on the organization’s Web site, members should not accept performance-based compensation. The Virginia-based association has 26,000 members.