Beaufort News

Salary for nonprofit head comes under scrutiny

Board members for Strive to Excel -- a nonprofit mentoring and college-preparatory program at Hilton Head Island High School -- say they don't remember discussing or approving a 42-percent increase in compensation for the organization's president.

There's a reason they don't remember, according to the attorney who files the group's tax reports: Tim Singleton raised his own compensation without asking the board because there essentially was no board to ask.

Singleton's salary and benefits from Strive went from $97,355 in 2008-09 to $138,582 in 2009-10, roughly one-third of the organization's revenue that year, according to federal tax forms.

Singleton, Strive's president and CEO and head coach of Hilton Head High's football team, writes his own paycheck from Strive funds and decided to increase his compensation because he was taking on more work after Strive's staff was cut, according to Bob Arundell, who prepared the tax forms. Arundell also is a former Beaufort County Board of Education member and has said Singleton is like a son to him.

Strive's bylaws require the board to conduct annual reviews of the president and approve any changes in compensation.

However, the board has met infrequently in recent years and struggled to assemble a quorum when it did, Arundell and others say.

Strive's bylaws also require the board to meet at least once a year, but meeting minutes indicate the last formal meeting was in April 2008. Further, tax records suggest that by 2010, the board had only three members; its bylaws require at least seven.

"It's really the board's responsibility to replace its members," Arundell said. "I don't think it's the executive director's responsibility."

Only one of the three members listed on Strive's 2010 tax filing, Tom Gardo, says he is still on the board. He says he and other board members "dropped the ball" and that his focus has been more fixed on Strive's programs than its board's governance.

"Now that we have this obvious scrutiny, we need to get our act together," Gardo said.

With that in mind, Gardo and Singleton met for about an hour Monday with several people interested in joining Strive's board. They discussed the best ways to reconstitute the board.

"We need to pull it back together because we're getting a black eye because of (this) situation," Gardo said.

SALARY NOT DISCUSSED, BOARD MEMBERS SAY

Strive to Excel was incorporated as a nonprofit organization in 2001. Its mission includes tutoring and mentoring at-risk students and helping participants develop social skills as they prepare for college or technical school.

The organization operates out of an office at Hilton Head High, conducts programs in other Hilton Head public schools and, before budget cuts, had a program at Bluffton High School.

According to Strive's most recent tax filing -- which reflects Singleton's compensation increase -- Gardo was joined on the board by former Hilton Head Middle School principal Sherry DeSimone and longtime school volunteer Betty Irby. DeSimone and Irby said in recent interviews they no longer are on the board.

The Strive tax form covering June 1, 2008, to May 31, 2009, also lists Carolyn Grant, the director of community relations and marketing for Tenet Healthcare; and former Hilton Head Middle School principal Donna Williams as board members.

Grant said she left the board in about 2008. Attempts to reach Williams were unsuccessful.

None of the board members contacted could recall ever discussing Singleton's compensation.

"I'm surprised to hear he made that much. Not to say he didn't deserve it. I just didn't know," Irby said, adding she thought Singleton's salary was paid by the school district.

Singleton is compensated by the district.

He is to be paid $16,000 this year for coaching the Seahawks' football team and $11,310 for his Strive to Excel work, according to district spokesman Jim Foster.

During the 2008-09 school year, Singleton was the director of the district's Project Success, a position created by the district to bolster underperforming students at the district's high schools. Essentially, Singleton was to replicate Strive-like programs at Beaufort County's other public high schools. He received $37,750 for that job, according to district records, in addition to his coaching stipend and his Strive salary, which at the time was $97,000.

Singleton remained in that position only one school year, however -- he told the Packet he didn't want to give up coaching football and thought the district job would spread him too thin.

The next year, Singleton's school district salary decreased by about $7,000 as his compensation from Strive increased by about $41,000.

Singleton said most of that $34,000 difference didn't wind up in his pocket but was used to reimburse the school district for the cost of health insurance premiums and other benefits.

EMPLOYEE EXPENSE RISES

As Singleton's full attention returned to Strive, Strive's revenue waned. The recession stunted charitable donations and one of its key fundraising events lost money, Arundell said. Gross receipts dipped from $537,526 in 2008-09 to $428,336 in 2009-10, according to tax records.

Singleton's compensation, then, was equal to about 32 percent of Strive's revenue.

Singleton cut three staff members, but the organization's overall employee-compensation expense rose from $176,000 in 2008-09 to nearly $220,000 in 2009-10, or an amount equal to about 51 percent of that year's revenue.

"(Singleton's compensation) doesn't upset me that much because for what he was doing ... it's not excessive," Gardo said. "It might look excessive, but (it) wasn't for what he's doing."

Opinion varies about how much a nonprofit should spend on operational expenses, such as employee pay and fundraising.

However, the federal government's Combined Federal Campaign requires that participating organizations commit no more than 25 percent of their total revenues to administrative costs. And the group Charity Navigator, a website that rates nonprofits, says tax-exempt groups should spend at least 75 percent of their money on programs, less than 15 percent on administrative expenses and less than 10 percent on fundraising.

Nonprofit organizations in South Carolina are required to register annually with the S.C. Secretary of State. A spokeswoman for that office said Strive's situation will be monitored, though she stopped short of saying the group would be investigated.

The Secretary of State does not grant nonprofit status, but the IRS, which does, "generally is interested in looking into things like excessive compensation," media relations director Renee Daggerhart said.

An IRS official said Monday that a group's failure to follow its own bylaws would not, by itself, threaten its nonprofit status.

PROGRAM DEFENDED

Strive to Excel's website includes letters of thanks from school principals, testimonials from parents and positive reviews from Hilton Head Island-Bluffton Chamber of Commerce CEO Bill Miles, Community Foundation of the Lowcountry CEO Dianne Garnett and others.

The Heritage Classic Foundation, the Arthur M. Blank Family Foundation, the Wal-Mart Foundation and the Tenet Foundation are listed as financial contributors.

Hundreds, if not thousands, of high school students have participated in the program since Singleton took it over, and "it would be a shame to see it come crashing down for lack of good governance," Gardo said.

That's why he was heartened by Monday's meeting. Six people attended. Several others unable to do so have indicated interest in joining the board, Gardo said, including one of the organization's "biggest benefactors" in recent years, who is the former CEO of a national corporation.

"Regardless of the board's problems, I think the program itself has had enough success over the years that if we are effective in showing people we have our ship in order, they'll continue to support the program," Gardo said. "We've got to show the cost controls are there and the governance is there."

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