how much is too much?
Minding the store - or milking it?
by G. M. Heller
Getting rich off the WAMC golden goose --
$500K fund drives don't even pay top six salaries!
February 16, 2001
It's next Friday February 23rd, and you're listening
to WAMC Northeast Public Radio (of course!), and you're being asked to
ante-up yet again for another WAMC fund drive. This one is being called
the cyber-drive, a lead-in to THE BIG ONE the following week, in
which WAMC is asking the public to shell out $500,000, the station's highest
goal yet for a single fund drive.
Okay, now it's eight days later -- March 3rd -- and that ear-bending,
thrice-annual beg-athon begins. But wait! Before you go reaching
this time for your check book or credit card, you might just want to stop
and consider the following tidbits gleaned from WAMC's recent IRS Form
990 filing. Form 990 is the annual return the IRS
requires from so-called
not-for-profit organizations exempt from
income tax under 501(c)(3) of the Internal Revenue Code.
Forget any notions you might have of folks at WAMC struggling to keep
the electric bill paid. Or the image of some bedraggled station fundraiser
wringing-out a measly commission trying to drum up a few bucks from a corporate
underwriter. Or the sound of an announcer pleading for volunteers to help
man the phones during the beg-athons.
And how about that picture in your mind's eye of a bake sale being held
outside WAMC's front door in order to keep creditors away. And remember
the cry (it's WAMC's mantra): 'Just three months operating expenses
in the bank!'
Imagine those bill collectors pounding at the station's front door.
Or worse, the image of WAMC going dark: the lightning bolts suddenly cease
their loud crackling from atop the Mt. Greylock antenna like some doomed
Radio Picture logo out of a King Kong rerun gone bad in the
It ain't necessarily so!
If these are the images you have of what life is like at WAMC -- a
constant struggle to keep the wolves at bay -- then it's time to lift the
wool that's been pulled over your trusting eyes. Dear reader, you are in
for a bit of a shock. WAMC is NOT on the verge of bankruptcy or collapse.
No way! Not this puppy! Errr, Golden Gosling, I should say.
The numbers WAMC reports every year to IRS present a far different
picture of the WAMC you think you know. We are talking MILLIONS of dollars
taken into station coffers each and every year. In fiscal 1999 alone, it
was $4.47 million.
Six figure salaries
And where does all this money go, this font of green mother's milk
spewing forth its succor of hard cash? Who and what is it all spent
The electric bill? Yeah, RIGHT! That's takes $79,000 annually
according to what WAMC told Uncle Sam.
And the rest? Answer: To salaries mostly. $2.2 million
of it. And while WAMC's rank-and-file employee may not be seeing
high pay, benefits and perquisites, the upper echelon is certainly getting
fat and happy. The upcoming $500,000 beg-athon won't even cover
the top six salaries!
And talk about perks! How about a hefty expense and travel account.
WAMC has some wonderful perks if one is a member of 'the inner kingdom,'
circle of loyalists closest to boss you-know-who.
A bureaucracy lovers paradise
But it's even worse than you think. The whole operation seems geared
to just one central concept: Raise more money in order to pay more and
higher salaries. 'Public radio' and quality programming seem almost
secondary, addressed mostly as an afterthought to the main challenge --
a means to an end. The end being green. (Remember how quick WAMC
was to cancel its Morning Pro Musica contract even before Robert
J. Lurtsema's passing? But hey! It's cheaper to produce a quick-and-dirty
classical music program in-house. Just spin some CD's for a couple hours.)
(To read a related story about Morning Pro Musica's
Nearly half of everything received used for salaries
FACT: At WAMC Northeast Public Radio, Inc., close to half of
all revenues coming in -- 49.1% of the total
monies coming in from direct corporate and public support (you), as well
as from government contributions (you, again) -- end up being paid out
to management and employees in the form of salaries, pension plan contributions
and benefits. Remember that fiscal performance figure, 49.1%!
(To see how WAMC compares to WNYC, New York and WETA,
Washington, DC, see Footnote #1 below.)
Local NPR station beats WAMC's fiscal performance
A revealing comparison is provided by a National Public Radio
station located right here in the Albany area. Its financial structure
and audience are identical to WAMC's. Yet astoundingly, this local station
paid salaries to its employees at a rate just 39.6%
of its total revenues. How did this local NPR station manage to
get by? How did it manage to pay its bills, pay its staff, provide
decent local news coverage, and still offer quality programming?
Not only that, but how did it manage to beat WAMC's fiscal performance
by almost 10%? What station was able to perform these miracles?
Well surprise! The station's call letters are W-A-M-C, and the year
is 1989, just ten fiscal years ago.
This nearly 10% difference begs several questions: Why is WAMC
paying out A HIGHER PERCENTAGE today -- nearly 10% more -- of its revenues
towards salaries, especially fattened managerial paychecks, than it ever
did in the past?
A corollary question: Why has WAMC's fiscal productivity fallen 10%
in those ten years, especially when it is bringing in the door more money
now than ever before? (For a brief discussion of
salaries and productivity, see Footnote #2 below.)
What factors at the station have changed so dramatically in the years
between 1989 and 1999 to cause WAMC to shell out such a dramatically higher
percentage of its revenues for salaries?
Why does WAMC constantly express need to raise (at thrice-annual fundraisers)
ever-increasing amounts of capital, the rate of increase being far higher
than that of inflation; and why is the station simultaneously awarding
its managers hefty salary increases higher than the inflation rate?
Minding the store - or milking it?
Is the answer to all these questions simply 'mismanagement', combined
with willful failure to keep expenses in check? Or could the answer
have something to do with simple greed, a conscious decision by those in
control to milk the station for all its worth?
At 1989's level of productivity, WAMC's present salary bloat is $430,000
For WAMC to operate as fiscally efficient today as it did just ten
years ago, with a 39.6% ratio of salaries to revenues, means that
the station's current payroll is bloated by about $430,000. In other
words, WAMC is doling out $430K more in salaries today than necessary or
reasonable, based on its own earlier fiscal performance, and also based
on the comparative fiscal performances of other publicly-supported stations
in the northeast and mid-atlantic. Simply put, WAMC is on a spending spree
with your money, splurging $2.2 million of it on salaries,
mostly managerial payroll. Based on its own performance history,
WAMC has already proven that it could get by on a comparative $1.77
million in salaries.
IRS requires names and salaries of paid officers and highest paid
So why does bloat exist at WAMC? Where is all this money going?
(Or rather, where does WAMC tell IRS the money is going?)
Who's making the bucks? Hint: It ain't the bulk of WAMC's hardworking
office staff, engineers and reporters who are receiving on average less
than $20K per year.
To discover answers, we again refer to WAMC's current IRS Form 990.
In it, WAMC is required to document for IRS the names of paid
officers and trustees, along with the five highest paid employees for fiscal
1999 (see list below).
Upcoming fundraiser - THE BIG ONE - won't even pay top six salaries!
The most striking revelation upon perusing the list and adding up the
compensation reported is that the upcoming $500K fund drive, THE BIG ONE
- the highest goal in the station's history for a single fund drive - won't
even be enough to pay the top six salaries! Those total $537,124
- and that figure does not even include the expense and travel accounts
Why does bloat exist at WAMC?
Why? Why does bloat exist anywhere. When arbitrarily high compensation
infects a 'not-for-profit' 501(c)(3) organization, and the salaries-to-revenues
ratio jumps, it's a sure bet that things are amiss. When management is
chief beneficiary of the large pay increases, it indicates that management
is more interested in lining its pockets than with fulfilling the stated
goals of the institution.
Reference United Way of America and its disgraced former chief
executive, William Aramony, who was discovered to be living a lavish lifestyle
at the expense of United Way's contributors (all with the permission
of United Way's board). Aramony was not fired by his board
until there was public outcry brought about by embarrassing revelations
in the media.
(To read more about the scandal involving William Aramony
and United Way, Click
Stealing the public's money - WAMC's management can get away with
Waste and mismanagement can occur anywhere, and when it occurs within
a publicly-supported institution having almost no outside oversight like
WAMC (do you really think WAMC's board of trustees - hand-picked by Alan
Chartock - is ever going to buck the boss?), then it's the equivalent of
stealing from the public - pure and simple.
Bloat exists at WAMC simply because nobody on the WAMC board stops it,
and the station's senior management can easily get away with it.
IRS asks: Total number of other employees paid over $50K
In addition to those five highest paid employees, WAMC is required
to tell IRS exactly how many additional employees, without
naming them, are being paid over $50,000 per year.
WAMC's answer to IRS: Six.
Hell! That's at least another
$300,000 WAMC beg-athon right there!
Just make sure you remember the battle cry: 'Just three months operating
expenses in the bank!'
WNYC and WETA pay out smaller percentage of revenues for salaries
For the sake of comparison, WNYC
Radio, located in that big city to the south where living expenses
are through the roof, pays out
38.6% of its total revenues for employee
salaries, pension plans and benefits, a substantially less payout percentage
than WAMC's 49.1%.
Even lower numbers prevail amongst those power-mad party animals south
of the Mason-Dixon line where mega-production house WETA-TV
& FM in Washington, D.C. pays out in salaries just 25.2%
of total revenues to keep its busy bureaucracy functioning. In other
words, ABOUT HALF the percentage that WAMC, in its generosity with YOUR
money, sees fit to pay out in compensation.
Salaries and productivity: WAMC's managerial pay way up, productivity
Payroll in almost any business rises to keep pace with inflation, BUT
seen as a percentage of a firm's budget or its revenues, the desired
goal is to have that percentage remain relatively stable or even go
down -- that is what is called productivity or 'getting the
most bang for the buck'. This of course assumes that the firm's
revenues are growing and the company is being run responsibly and prudently.
Firms like General Electric Co. shoot off skyrockets and brag to Wall Street
analysts whenever productivity increases, and whenever payroll and managerial
salaries, as a percentage of gross revenues, decline. At WAMC, just
the reverse is taking place. Revenues have more than doubled
since 1989, from $1.72 million to $4.47 million, but productivity
has shown a steep decline, 9.5% in ten years. Meanwhile,
payroll and managerial salaries have jumped dramatically,
from a payroll of $682,000 in 1989 to $2.2 million in fiscal
1999, a leap from 39.6% of 1989's gross revenues to the current
(Note: Revenue and payroll figures are shown rounded-off,
but percentages are calculated using WAMC's reported figures.)
WAMC's biggest beneficiaries
Look over the following list of familiar names, along with the total
amount of WAMC's generosity (read: your money) given to each.
Then decide for yourself just how bloated the station's payroll is, and
whether WAMC Northeast Public Radio is really not-for-profit.
Chairman of WAMC's Board of Trustees,
**Ahhh, what more can be said about Mr. Chartock
that he himself has not already told us. This reported figure of
$99,599 does not include Mr. Chartock's annual travel expenses.
WAMC reported to IRS total travel expenses of $35,201 for
fiscal 1999, so it is anybody's guess how much of that is attributable
to Mr. Chartock.
**Also not included in the $99,599 figure
above is Mr. Chartock's WAMC expense account, entertainment account, and
**Also, this $99,599 figure does not include
Mr. Chartock's annual salary and employee benefits from The State University
of New York where he is employed as a full-time professor of political
Senior Development Associate - Capital Region
Assistant Executive Director
Assistant Executive Director
Development Associate - The Berkshire Regions
Director of Underwriting
All salary totals displayed
above reflect employee 'compensation' plus
employee benefit plans and deferred compensation'. Fiscal data
contained in this article is taken from WAMC, Inc.'s IRS Form 990 -
Return of Organization Exempt from Income Tax - for fiscal 1999,
tax period beginning July 1st, 1999 and ending June 30th, 2000. The
document filed with IRS is dated November 10th, 2000, signed by
Alan S. Chartock, and was prepared by the accounting firm of Urbach,
Kahn & Werlin Advisors, Inc., Albany, New York.
Other fiscal data contained
in this article is taken from WAMC, Inc.'s
IRS Form 990 - Return of
Organization Exempt from Income Tax - for fiscal
1989, tax period
beginning July 1st, 1989 and ending June 30th, 1990. The document
filed with IRS is dated November 18th, 1990, and was prepared by
the accounting firm of Urbach, Kahn & Werlin PC, Albany, New
WAMC's 1999 IRS
Form 990 was obtained from the U.S. Internal Revenue Service under
the Freedom of Information Act (FOIA). By federal law, it
is also available for public inspection at the offices of WAMC Northeast
Public Radio, Inc. at 318 Central Avenue, Albany, New York during regular
business hours, and without advance notice.
WAMC's 1989 IRS
Form 990 was obtained from WAMC Northeast Public Radio, Inc..
Also included in this article
is fiscal data compiled from IRS Form 990 filings made by the following
not-for-profit 501(c)(3) organizations:
WNYC Radio, Inc., New York, New York;
The Greater Washington Educational Telecommunications
Association, Inc. (WETA), Washington, D.C..
©2001 WAMC Northeast Pirate Network®/™