In the middle of instituting two rounds of major layoffs in 2012, the non profit Washington Hospital Center gave Bill Clinton a whopping $225,000 speaking fee to appear at its annual Cardiovascular Research Technologies conference, where Clinton expounded on health care reform and his own battle against heart disease. The hospital didn’t disclose the $225,000 payment on its annual Internal Revenue Service forms, but it surfaced on the list of income sources the ex-President provided on his wife’s required ethics filing as Secretary of State. This waste of precious funds is unconscionable, and it is also all too common.
The story was originally broken by the Washington Times, with its angle being that Clinton was the villain. I will always enjoy a little Clinton-bashing, but that is unfair and ridiculous. No one forced the hospital to pay such an exorbitant fee. No one forces any organization to pay such speaking fees; if organizations wouldn’t pay them, Clinton and other blue chip speakers would charge what the market would bear. Both Clintons charge in this range to speak, and remember, the time they devote to spreading their pearls of wisdom is typically an hour or less. Non profits as well as deep pocket corporations like Goldman Sachs, American Express and Fidelity Investments also pay the fees or similar ones, and it is an abuse of discretion whether the payer is a non profit or not. *
From the Times story:
“The hospital is hardly the only 501(c)(3) organization to shell out big money to hear Mr. Clinton speak. The Naples Philharmonic Center in Florida paid Mr. Clinton $200,000. Later, the nonprofit filed IRS forms showing that it lost $338,000 in overall revenue of about $24 million that same year. Another organization listed on Mrs. Clinton’s ethics form, the Bushnell Center, shelled out a six-figure check to Mr. Clinton. IRS forms show it reported a $1.8 million deficit during the same tax year it hired the former president.
…Washington Hospital Center officials confirmed their payment to Mr. Clinton… So Young Park, a hospital spokeswoman, said the meeting generates “net revenue” for the hospital but declined to provide any details about how much money the conference raised or what portion of that revenue officials believed came from people coming to hear Mr. Clinton’s speech.”
That is because the claim that such big ticket speakers draw significant attendees is a convenient myth. I’d be shocked if a more than handful of attendees decided to shell out the resources it takes to attend a conference—registration fees, hotel, meals, air fare—because Clinton was speaking. The fees can’t be defended in a business context, or any other. So why do organizations do this?
I saw the corrupt and foolish process up close when I oversaw conventions for a major Washington lawyers association in the 1980’s. One year, with the association in a cash crunch and facing falling membership, the organization president and executive director insisted that we hire a pre-Tonight Show Jay Leno for the opening convention dinner at the whopping cost of $75,000 for a 45 minute routine. We couldn’t afford it; he wasn’t going to draw attendees. No, the real reason was clearly that the honchos in charge just liked the idea of bringing in a big name like Jay Leno and wanted to be able to say that they hired him. It was irrational, that’s all. When other organizations do this with political figures like the Clintons, there may also be some vague and foolish hopes that the big check may buy a futile favor, but the basic decision-making process is the same. This is starry-eyed, celebrity-driven, juvenile, managerial recklessness, and any organization that sees such fees paid out, whether the group is flush or swimming in red ink, should punish those responsible, ideally with pink slips. No hour long speech is worth six figures, to its audience or its host. Even elite professional athletes don’t earn $200,000 an hour.
Speaking of the Washington Hospital Center deal, Dan Fields Jr., president of the Service Employees International Union Local 722 representing hospital workers, told the Times, “No disrespect to Bill Clinton, but that money could’ve gone a long way and been put to better use.” $225,000 could hardly be put to worse use. Clinton isn’t hurting for money. The tangible benefits are nil; the likelihood of anything Clinton says being life-changing for an attendee is slim at best. Clinton and any other celebrity speakers have a right to ask for any fees they choose, and responsible organizations, especially non profits, have an ethical obligation to laugh in their faces, offer 20,000 bucks (or less) plus travel expenses, and say take it or leave it.
By the way: I’ll do an hour on ethics for $5000, and I guarantee the attendees will learn more from me than they do from Bill. They will learn, for example, why it’s unethical for a non profit to waste charitable funds and grants lining the pockets of the likes of William Jefferson Clinton.
* Note: The hypocrisy of conservatives attacking Clinton on this basis is neon bright. They defend outrageous corporate executive salaries and golden parachutes as free market choices, but attack an ex-President for accepting a speaking fee achieved on the open market.
Source and Graphic: Washington Times
7 thoughts on “Those Unethical, Exorbitant, Non-Profit Speaking Fees…But Don’t Blame Bill Clinton!”
You are right about the motives for these events – it often has not much to do with the content, and a lot to do with the celebrity component of the event.
A story I heard from the CEO of a Speaker Bureau: a business client couldn’t decide between Michael Porter (Harvard Business School strategist) and Lester Thurow (MIT Economist).
So they ended up choosing – Mike Ditka.
I think your rant may be well placed with respect to 501(c)(3) organizations, which are tax-advantaged. For industry associations, like those of lawyers, I don’t see quite the same issue. Though I’m not sure how to parse that instinct, if they’re legally the same. (Maybe it’s more outrageous for hospital organizations than for lawyers’ organizations? I don’t know – help me out here).
I see it as a waste of funds and budget misfeasance, simple as that. Both the association and the non profit hospital have missions, and spending such sums of entertainment or speakers don’t further them. At the association, the governing body went crazy when they saw Leno’s fee after the fact. The member-president apologized, and took the hit so the exec wouldn’t be fired. “It was just a mistake, a miscalculation, ” he said, apologizing. ” We need better review and oversight.” It was a lie. I had raised the issue, compared figures, predicted exactly what happened. I was told—“Just do what the president wants. None of this matters to him. He just wants to hire Leno.”
The consequences? Not many layoffs—just the sale of the association’s publications arm, and the firing of the guy responsible for developing trial practice materials for the members.
While the $225,000 is a lot of the money let the market determine what they can get. That’s what you do with you ask for $5,000.00 so why shouldn’t he?
Did you read the post? I said exactly that. But the demand creates the market, not the supply. And there is no legitimate reason to demand canned speeches from pols at that price.
This is nothing compared to what some performers charge. Then again, with Andrea Bocelli and the crowds he pulls you can still pay him $3M (yes, that’s what he charges per concert) and walk away with a handsome profit.
A bit of hyperbole there, Steve. Nothing? I know what performers charge, and they also are entertaining, not blathering with canned speeches. They are also good at what they do: neither Hillary nor GWB are skilled speakers…as performers, they would be William Hung. Real performers have productions, and back-up singers: it’s a show. Not many solo performers charge $200,000 plus for a single set, and not many organizations are foolish enough to pat them. Dictators and billionaires, yes.