As I researched the tradition it seems clear that there is no one halakha for how much one can make, although there are certainly parts of our tradition that implore us to make sure that those who work for us (not making a distinction between for-profit for not-for-profit) make enough money. Additionally, the power of this question might be felt differently at different times in the life of an organization, especially as it relates to the economic culture. So although there aren’t specific texts about laws and non profits, there are texts from tradition that can help us examine how an employer should treat its employee, which help us think about the standards by which an organization might function. There are three texts though that I would like to point to, that help us think about the question.
In the Torah we read that employers have an obligation to treat their workers fairly, as it says in Leviticus “Do not keep the wages of the worker with you until morning.” Meaning, don’t ask someone who works for you to wait to cash their paycheck. Make sure that you have enough money in the bank to make payroll.
Additionally, as Rabbi Jill Jacobs references in her book There Shall Be No Needy, Rabbi Ben Tzion Meir Chail Uziel, a former Sephardic chief rabbi first of Palestine and then of he state of Israel (1880-1953) wrote, “Employers are obligated to behave with love, honor, goodwill, and generosity towards their workers.” One might say then, that the employers of a non profit are the board of directors. If that is the case, then they have the obligation to be generous with those working for this cause and not find ways to withhold salaries or rather be generous, if possible with those salaries.
But the difficult question remains: how does one determine salaries.We read in Mishnah Bava Metzia 7:1, “If one hired workmen and asked them to work early or late, he has no right to compel them in any locality where it is not customary to work early or to work late; where it is the custom to furnish them with food he must supply them with food; if it be the custom to provide them with ‘sweetstuff’, he must so provide; everything should be in accord with the local custom.” This is a subjective statement because local customs vary from city to city and cost of living in the city might need to be taken into account. Additionally, it is unclear from the tradition if the state of the economy should make a difference as to the debate over a salary. For example, this statement in the mishnah doesn’t demand that executives take pay cuts during tough times if others are doing it, although one could suggest that one should if others are doing it as it becomes a local custom. However, as Howard Rieger, the former, president and CEO of United Jewish Communities, the national umbrella organization of federation (now known as Jewish Federations of North America) said, “that in a competitive marketplace for management talent, not-for-profits needed to weigh the urge to cut salaries for the sake of appearances against the need to pay enough to retain top-flight employees.” http://www.forward.com/articles/107575/#ixzz1DVdUfrx6 As one can see from the article in the forward there was a big debate within the national Jewish community about which custom should prevail.
As we can learn from the above texts is that what seems to be important, in addition to what employees get paid, is the perception of the functioning of the non profit itself and the local or national context in which that non profit operates. By using phrases such as love, honor, and local customs, there is a sense that there needs to be derekh eretz in interactions between people and that there needs to be transparency and honesty in the governance of the non profit in order for there to be trust and faith in the leadership’s decision not only about the salaries but about the allocation of total resources as well.
Since the economic meltdown of 2008, there has been considerable discussion of the salaries of executives in many industries, non-profits included. In 2009 the Forward published an article (http://www.forward.com/articles/107575/) noting executives at Jewish charitable organizations who took pay cuts when their organizations were downsizing and those who did not. While the article was critical, no reference was made to Jewish ethical principles that would reflect on the pay levels of these individuals.
As a follow on to that article Rabbi Levi Brackman published an essay in Y-Net news (http://www.ynetnews.com/articles/0,7340,L-3730392,00.html ) in which he attempted to lay out the ethical issues involved. While he cites various halakhic principles, particularly the rules governing those who collect Tzedakah, in the end his effort is less than convincing.
The difficulty is that there is very little material to draw on. There are many teachings detailing the obligation of employers to pay their employees in a timely manner, in accord with local wage scales, and in a way that avoids oppressing the worker. Additionally, workers have rights to various benefits including, depending on local custom, the right to eat produce if they work in an agricultural setting and to be protected against injury.
Just as Rabbi Brackman attempts to set a standard based on the strictures surrounding the role of the gabbai tzedaka, the head of the communal charity fund, one might try to build a case based on the long debate over paying rabbis. Since the study and the teaching of Torah are mitzvot, Divine obligations, one should theoretically not be paid for such activities. The argument extended over centuries, though even in Talmudic times teachers were paid. While some passages suggest they were paid for something other than teaching Torah directly (see B. Nedarim 37a), such sleight of hand was not convincing and rabbis have been paid for their services for many centuries.
None of this is very useful in determining an appropriate level of executive pay, either in for profit or non-profit organizations. By way of analogy to what we learn about wage earners, I believe we can say that executive salaries need to match the pay scale of the industry. This, however, is so broad as to be useless in the contemporary world.
In the end I know of no good sources to provide guidance in determining the salaries of non-profit agencies. The question is now on the table, in Jewish and non-Jewish organizations. It will be interesting to see what answers emerge.
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