Publisher's Note: Charitable?
By Jody Reese
A few weeks ago N.H. Attorney General Michael Delaney laid down the hammer on the proposed Catholic Medical Center affiliation with Dartmouth Hitchcock Health, calling it a takeover of CMC.
Under the current structure of the deal, Delaney says Dartmouth Hitchcock Health would essentially take over CMC, making it more difficult for CMC to continue its charitable mission. Delaney went a step further and criticized the pay of CMC CEO Alyson Pitman Giles, which topped out this year at more than $1.3 million, though to be fair it was more like $900,000 the year before. According to Delaney, Pitman Giles’ pay was “significantly greater than her peers.”
Frankly, I don’t have an issue with Pitman Giles’ pay or the merger — and both for the same reason. CMC is no charity.
CMC operates like a business and if it operates like a business, then it is one. One of the reasons given for boosting Pitman Giles’ pay was that she improved the hospital’s margins. Charities like the Salvation Army or Boys & Girls Club don’t have margins and don’t use that sort of business language. CMC is a non-profit in the same way the Union Leader is a non-profit (not kidding, it’s owned by a non-profit) — it’s just a legal designation.
However, since CMC isn’t really a charity, it should pay its fair share of taxes, just like the Union Leader does.
If, on the other hand, CMC wants to take advantage of its charitable designation — and of course function as a charity — and not pay taxes, then Pitman Giles should take a huge pay cut and then it’s fair to look at the affiliation through the lens of how it would affect CMC’s charitable mission.
The balance between a charitable mission and attracting top management talent can be tough, but in the final anaylsis people who believe in their charities’ mission do it for the cause, not the cash, and can end up being great leaders without huge salaries.