|August 7, 2012|
|IABC Won’t Spell Out Contract of Sorek|
|By O'Dwyer's Staff|
|by Jack O'Dwyer|
The International Assn. of Business Communicators, in a move that puts it in the same bed with the stonewalling PR Society, is refusing to reveal the contract terms of its new executive director, Christopher Sorek.
Sorek joined IABC in late June, succeeding Julie Freeman in the top executive post after a ten-year term by Freeman, who had the title of president. IABC currently has no president. Elected chair is Kerby Meyers, a solo practitioner based in Denver. His firm is The Communications Refinery.
Paige Wesley, IABC VP-marketing and communications, said that Sorek’s compensation will be in the 2012 IRS Form 990 and that this meets “both the letter and spirit of the law.”
IABC is in the habit, like the PR Society, of filing its 990 late in the year. It takes three to six months for online reporting services such as GuideStar and Foundation Center 990 Finder to access such reports, convert them for use, and post them.
The 2012 Form 990 of IABC will likely not be available in electronic form to members, non-members and the press until early 2014, a year and a half after the contract signing. Only a half-year of compensation would be reported at that time.
PRS’s COO Bill Murray was given a new three-year contract in January of this year but neither he nor the board will reveal its contents. His compensation totaled $377,000 in 2010, the latest year available.
Since PRS files its 990 late in the year, the likelihood is that an electronic version of the 2012 990 won’t be available until early 2014 which is two years after the contract started. Both IABC and PRS are violating the spirit if not the letter of federal law which says members of a group have the right to know what their highest paid staff members are making.
PRS Was Once Open about Contracts
The PR Society, having given Ray Gaulke a two year contract as COO as of July 1, 1993, provided full details of it to members and the press.
His salary was to be $150,000 for each year of a two-year contract. He received a signing bonus of $25,000 and was to receive a pension of $14,000 yearly. Payroll taxes and benefits were to total another $12,000 yearly.
PRS also provided the cost of the search by Korn/Ferry International: $50,000. There were $8,000 in expenses associated with the search.
Freeman, according to the 2010 Form 990 of IABC, had a salary of $150,479 and received $42,263 in pay from IABC and “related organizations.” Next highest paid executive was Christopher Hall with pay of $124,356 and other compensation of $31,236.
IABC Payroll Is 40% of Income vs. 50% for PRS
IABC’s 2010 payroll/fringes of $237,598 is 40% of revenues of $5,909,364.
At the PR Society, which is almost a duplicate of IABC in terms of publications and other services offered, ethical code (unenforced), accreditation process, nationwide regular and student chapters, etc., payroll costs of $5.4M in 2011 were 50.9% of revenues of $10.6M.
Although IABC has dubious accounting, as evidenced by dual IRS Form 990s on record, it paid $57,775 for accounting in 2010 vs. PRS’s accounting costs of $47,230 in the same year.
IABC has been reporting its financial results to the IRS using two different Employer Identification Numbers (EIN) since at least 2004 (earliest year available).
Under one number, 94-3046165, the one that was available to us, IABC only has about $1.6 million in income. Pay/fringes of the top six or more staffers are not provided.
This low figure has mystified us for years but attempts to find out how this could be have gone nowhere until now. Since the group has about 14,000 members who currently pay $324 in national, regional and chapter dues, total income had to be $5M+.
We have now been supplied with the new EIN of 03-4080669 which shows income of $5.9M for 2010.
IABC H.Q. Filed for Chapters
IABC’s explanation is that the 03-4080669 filing is for IABC itself while the 94-3046165 is for the chapters. PRS chapters with more than $25,000 in revenues file their own 990s. We don’t understand why IABC is filing returns for its chapters.
Occupancy costs for IABC’s San Francisco h.q. were $423,100 vs. PRS’s $738,076 in New York.
Legal costs at IABC were $24,603 in 2010 and similar amounts are reported in previous years.
PRS, which leans heavily on advice from the Washington, D.C., law firm of Venable, has spent $400,465 on legal advice in the five years ended Dec. 31, 2010. It has yet to reveal legal costs for 2011 since they are in Form 990. PRS for the past several years has withheld the 990 from members and the Assembly until after the Assembly.
PRS Is Becoming Like IABC
The PR Society, in several ways including keeping its distance from the press, is becoming more and more like IABC—mostly an organization of house organ editors or those whose attention is focused inward at their employers.
IABC’s membership is 65% corporate and institutional—39% corporate; 12% nonprofit and association; 8% government and military; 6% educational, and 14% counselors including solo practitioners. Membership is 80% female.
PRS is 69% corporate and institutional: 24% corporate; 17% nonprofit and association; 13% government and military; 15% educational, and 23% counselors including solo practitioners. Membership is 75% female.
Neither IABC nor PRS put their audits and Form 990s in the free area of their websites early in the year as recommended by the Independent Sector, an association of more than 500 non-profits. IS chides the nonprofits for almost automatically seeking “extensions” for their tax returns.
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