Check non-profits' subsidiaries to help track executive pay ...

John Cheves of the Lexington Herald-Leader used IRS form 990 to find that a local non-profit mental health agency had a for-profit armwhose clients included other state-funded regional mental health boards. John writes that the subsidiary sells ?software based on expertise it developed from decades of running public mental health programs.?

Photo: Pablo Alcala | Staff ? Lexington Herald-Leader

To get this information, John pulled the last three years of 990 filings, which reporters can get through GuideStar or directly from nonprofit agencies. Agencies usually list related organizations or subsidiaries near the end of the tax returns, John says. That list should indicate if the unit is a non-profit or a for-profit organization.

John Cheves

?For any related non-profit organizations, you should pull their tax returns and do a similar probe,? John says. ?It would be unusual for a subsidiary to have its own set of subsidiaries, though not unheard of.?

Today?s Tip: Check non-profit?s subsidiaries to see if executives earn additional pay.

?I just like to track every arm of the structure because executives can take some or all of their pay through subsidiaries,? he says. ?The previous CEO of the non-profit, now retired but still present as a paid consultant, is getting his paycheck through the for-profit, not through the non-profit mothership.?

This story ran with another one examining executive pay, lobbying expenses and real estate.

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