New York – The Manhattan DA and NY state attorney are investigating the downfall of the Federation for Employment & Guidance Services (FEGS), a historic nonprofit agency that had been around for 80 years.
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The agency, which runs jobs centers and helps people with disabilities find work, revealed in December 2014 that it was $20 million in debt. The group said their financial trouble started when it lost grant money, but according to the NY Daily News (http://nydn.us/17j1aPi), the debt is still growing.
Last year, 81 FEGS administrators and execs were paid $100,000 or more.
CEO Gail Magaliff was paid $482,436 with an additional compensation of $156,444 in 2013, and her successor, Ira Machowsky, who was picked over for Mental Health Commissioner Kristin Woodluck, earned $343,000 in 2013 and 2014, while many of FEGS’ vendors have not been paid in months.
The organization is one of the seven largest Jewish charities in the U.S. It has approximately 2,000 employees and annual budget of $250 million, mostly funded by grants from city and state. The nonprofit is currently looking for other social service agencies to handle its contracts.
Information taken from NY Daily News
Hope more arrests are not coming.
Sounds like a big scam to me
With all the programs being funded through government programs, I don’t understand how they could run out of money. Now other organizations will have to step in and take over the programs.
How does a non profit that is funded with government money pay such high salaries?????? Just saying.
The salaries aren’t so much the issue, though there are way to many big earners in that organization. Their overall budget is the size of a significant corporation and to get qualified people to run it, you need to be competitive salary-wise.
At the same time, it is grossly negligent for a non profit like that to be in debt. You have an annual budget and if you run it responsibly, you can’t help but have some surplus, not a deficit.
An organization that runs on grants knows their budget in advance and should operate accordingly.