As California pours billions of taxpayer dollars into fighting homelessness and expanding social services, a growing debate is emerging over whether enough oversight exists to guarantee public money is reaching the people those programs are intended to serve rather than compensating the executives who run them.
The latest example comes from Southern California, where tax filings show Carol Adelkoff, the chief executive of a nonprofit organization that operates domestic violence shelters and homelessness programs, received more than $1.6 million in compensation over two years, an amount that is more than triple the pay of leaders running significantly larger organizations. Adding to the public frustration is that Adelkoff doesn’t even live in the state. She lives in Hawaii.
In the nonprofit’s 2024 tax form, the latest to be made public, Adelkoff earned $742,181. In 2023, she made even more: $907,923, which included a $495,000 bonus, a number that exceeded her base pay at the time. The group’s finance director was the next highest-paid employee, raking in $206,000.
The organization, 1736 Family Crisis Center, says the payments were largely the result of decades of accrued vacation time that its board approved paying out before her retirement. But the disclosures, reported by the Los Angeles Times, have raised questions that go beyond a single nonprofit organization. Specifically, how closely are boards overseeing executive compensation? Are organizations receiving millions in taxpayer funding held to the same accountability standards expected of government agencies? And at what point does unusually high executive pay weaken public confidence in nonprofit groups entrusted with addressing pressing problems?
Those questions have become critical as California lawmakers, local governments, and taxpayers scrutinize the effectiveness of homelessness spending amid encampments continuing to pop up and the rising demand for transparency.
Unlike private companies, nonprofit groups are exempt from paying federal income taxes. Many also rely heavily on grants, making taxpayers their largest backers. While nonprofit executives can earn high salaries, federal regulations require compensation to be “reasonable” and approved through an independent governance process.
Experts say those rules often leave considerable room for interpretation and, in some cases, abuse.
According to IRS Form 990 filings compiled by nonprofit compensation trackers, including the Chronicle of Philanthropy’s Executive Compensation Database and Charitywatch.org, the nation’s highest-paid nonprofit executives can earn compensation packages in the eight figures. The top of the list is dominated by leaders of large nonprofit hospital systems and healthcare organizations, like John Murphy, president and CEO of Nuvance Health, who has received reported compensation exceeding $30 million, and Ernie Sadau, president and CEO of CHRISTUS Health, who has earned nearly $18 million.
While such figures may seem significant, the organizations are among the largest nonprofit enterprises in the country, operating multistate hospital systems with billions of dollars in annual revenue, thousands of employees, and extensive patient networks.
Brian Mittendorf, a professor of nonprofit accounting at Ohio State University, told the Los Angeles Times that the larger issue raised by the recent compensation disclosures in California is not necessarily the dollar amount but the governance decisions that allowed such a large obligation to accumulate over time.
“The bigger question is, was it appropriate for a person to be able to accrue that much money and suddenly get it paid out?” he said.
According to 1736 Family Crisis Center, the compensation spike reflected decades of unused vacation that accumulated because Adelkoff rarely took time off from work while overseeing a growing network of shelters and crisis services in California. The organization said its board worked with legal and financial advisers to reduce a mounting vacation liability that had accumulated over four decades.
But governance experts note that most nonprofit groups impose limits on how much unused vacation time employees, as well as their executives, may accumulate to avoid large financial liabilities developing over many years.
Laurie Styron, chief executive of nonprofit watchdog CharityWatch, described the size of the payout as “highly unusual” and questioned how the board reached its decision.
“How was this decision made?” Styron asked.
The case has also renewed discussion about the role nonprofit boards play in overseeing organizations that rely almost entirely on taxpayer funding. Unlike publicly traded corporations, where shareholders can challenge executive compensation packages, nonprofit boards usually operate with less visibility, despite overseeing organizations supported by government grants.
That lack of visibility has become a recurring point of concern as public officials demand greater accountability for homelessness spending across California.
The debate goes beyond executive salaries.
Critics claim taxpayers want to know how much funding is directed toward administration, executive compensation, and overhead compared with frontline services such as shelter beds, counseling, mental health treatment, and permanent housing.
Supporters say that attracting experienced executives requires competitive compensation, particularly for organizations responsible for handling complex government contracts, complying with extensive regulations, and overseeing hundreds of employees and multiple facilities operating around the clock.
The challenge is distinguishing between a pay package that reflects decades of leadership and compensation that appears excessive when compared with similar organizations.
The recent disclosures illustrate how quickly those distinctions can become politically significant.
For Californians already questioning the effectiveness of spending so much on homelessness, a problem that has only grown in places like Los Angeles, pricey payouts risk reinforcing doubt that funds are reaching the people they were intended to help. Even when compensation abides by legal requirements, perception matters because organizations dependent on funding ultimately rely on public support.
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As California continues directing billions toward homelessness, domestic violence prevention, and other social services, scrutiny is increasingly shifting beyond program outcomes alone. The focus is widening to include the financial stewardship of the organizations receiving those dollars, and whether nonprofit boards are exercising sufficient oversight over the executives entrusted to spend them.
Multiple attempts to contact someone at 1736 Family Crisis Center for comment were unsuccessful.