Over the last two and half years, I have relayed dozens of stories about the good work the HALO (Hazardous Area, Life-Support Organization) Trust (www.halotrust.org) does in Africa. HALO has cleared thousands of landmines from Angola, Mozambique and Somalia, launched a new project in Zimbabwe and returned huge swaths of land to their communities to allow people affected by war to re-start their lives. Unfortunately, other outlets choose not to cover these stories which are the results of the efforts of thousands of men and women working around the world. Instead, two stories have been making the rounds in the last week, one of which has had a positive resolution, the other not so much, not yet. On January 21st, more than 60 of HALO’s employees, all Afghan nationals, were kidnapped by armed men near the city of Herat. After a few hours, all of the deminers were released thanks to the efforts of Afghanistan’s police forces (Washington Post). A couple of days before the kidnapping, stories appeared in the British papers the Telegraph and the Daily Mail describing the annual salary and benefits paid to HALO’s chief executive and co-founder, Guy Willoughby. The stories had a breathless tone as they described the fact that HALO pays for Willoghby’s four children to attend private schools where the annual tuition costs are US $45,000 or more. While I am not as scandalized by these stories as the Daily Mail or Telegraph would like me to be because I am admirer of HALO’s landmine clearance work, I do think the stories raise two important questions that are applicable to the entire not-for-profit community: 1) Is the HALO Trust’s chief executive (or any organization’s chief executive) overpaid? (No.); and 2) Did the HALO Trust’s board of directors do its job as a not-for-profit organization’s board? (Maybe.)
First, it’s important to remember that the Daily Mail is a celebrity-driven tabloid whose coverage of the story always includes references to the celebrities associated with HALO including Princess Diana, Prince Harry and Angelina Jolie. Were it not for these celebrities and their ties to HALO (and the opportunity to include photos of them with the story), the Daily Mail would probably not have covered this story. The Telegraph is not innocent in pursuing the celebrity angle either, naming Prince Harry and Angelina Jolie in their story’s headline. Second, I’ve covered questions of waste and fraud at not-for-profit organizations elsewhere on this blog and I think these particular stories represent an incomplete understanding of how the not-for-profit industry operates and exploits that absence of understanding to sensationalize what is a rather mundane question of executive compensation. Third, the HALO Trust clears landmines from countries like Afghanistan, Mozambique, Sudan, Sri Lanka; the importance of that work should never be lost in these organizational matters. So, let’s get into the substance at hand.
Question 1: Is the HALO Trust’s chief executive overpaid? Short answer: no. Like most chief executives at not-for-profit organizations (or charities), Mr. Willoughby’s primary responsibility to the organization is to raise money for the work of the organization and by any measure, he’s been pretty successful. In FY2013, HALO recorded income of more than US $43 million and employed between 5,000 and 8,000 people in more than a dozen countries around the world. Founded in 1988, HALO is celebrating its 25th anniversary and Willoughby has said in the past that he believes a mine-free world is possible in the next ten to twenty-five years. HALO has confirmed that it offers a “school fees scheme for senior staff with more than seven years’ service, and children from the age of 10 to 18 are eligible;” such benefits are considered taxable income and part of the employees’ salary (Third Sector). HALO defended its decision to offer such a benefit to Willoughby and a couple of other staff as being in line with benefits packages offered by United Nations organizations and other large development organizations for whom payment of school fees for expatriate staff is common.
Guy Willoughby’s salary is set by the HALO Trust’s board of directors and Willoughby is accountable to the board. Therefore, the salary HALO pays Willoughby is based upon the value the board places upon his work, which is very high and based upon the results he has achieved. Think about this way, if Willoughby were not successful at raising money and raising awareness, the opportunity for this story would not exist. Before the HALO Trust was founded, the concept of humanitarian demining barely existed. Willoughby has helped to shape the industry he is now a leader of. His fundraising success, work that has paid for clearance of thousands of landmines and enabled hundreds of communities to rebuild after conflict, makes him valuable to the organization as a leader and spokesperson. Willoughby’s ability to recruit celebrities, like Diana, Harry and Angelina, to help him spread the word about landmines is what makes him valuable to the organization. Without Willoughby, there would be no HALO Trust and no story for the Telegraph or Daily Mail to cover. Which brings us to the board.
Question 2: Did the board of directors of the HALO Trust do its job? Short answer: maybe. The board of directors for a not-for-profit organization or charity is tasked with oversight of the organization on the public’s behalf. As the co-founder of the HALO Trust, one of Willoughby’s responsibilities has been to recruit a board of directors to oversee the organization. And as the chief executive, Willoughby is accountable to the board. This is the problem. Willoughby is accountable to people he personally recruited to serve on the board; many of the board members joined the board because they believed in what Willoughby had created and wanted to support it. In situations like this, where a person starts and runs an organization, the board of that organization is often in the difficult situation of managing what it sees as the greatest asset of the organization: the founder. In that situation, can the board objectively evaluate the chief executive’s performance? Some boards can and some can’t. It all depends on the people who serve on the board and how they view their role. Or asked another way: is their role to support the founder’s vision or support the founder, him or herself? It can be hard to separate the person from the vision and it is not a task I envy of anyone.
Also, it is important to ask what is the correct motivation for the chief executive. In the for-profit world, chief executives are believed to be best motivated by financial compensation in the form of high salaries and stock options or benefits. If a chief executive felt he or she would receive a better financial package elsewhere, the executive would be tempted to leave. This assumes that chief executive’s skills are easily transportable and applicable to different companies. In the not-for-profit world, we believe (hope?) all employees are motivated by the mission of the organization and not by financial rewards. Sure, we all want to be able to provide for ourselves and our families, but the opportunity to support the organization’s mission alleviates the need for using money as the sole incentive. This leads to the question: what would it take to lure Guy Willoughby away from the HALO Trust? I don’t know, but if HALO’s board doesn’t, then it needs to find out.
Question 3: Does it matter? No. The HALO Trust, as evidenced by the experience of its deminers in Afghanistan, works in some of the most difficult conditions doing work that is necessary and life-saving. With thousands of men and women in the field clearing landmines to help rebuild countries torn apart by conflict, the real story about HALO should be about the lives it saves. If only it could get as much coverage for that. The not-for-profit community does far more good than it gets credit for and the sensationalization of stories about the industry is reckless and irresponsible. Could we be better? Yes, but there are safeguards in place – in the form of boards of directors, audits, financial reporting and internal controls – and they work far more often then the authors of stories like the Daily Mail’s would have you believe.
Michael P. Moore
January 23, 2014