Charity founders accused of taking large salariesPosted: Updated:
Sara O'Meara and Yvonne Fedderson started the charity that become Childhelp Inc. 55 years ago. The charity advocates for abused and neglected children and is a favorite among local law enforcement and elected officials.
But O'Meara's and Fedderson's salaries make some question whether more of the money Childhelp raises from donors and receives from the government could go to the charity's vital programs.
"They need money like I need a nine-room mansion," said Greta Rogers, who describes herself as a no-nonsense pragmatic.
Rogers spoke out against an effort to get the city of Phoenix to help pay for improvements to Childhelp's advocacy center. It is where abused children are brought to meet with detectives, prosecutors and therapists under one roof.
The city of Phoenix has agreed to help fund the center to the sum of $450,000 per year.
"This is money the people of Phoenix do not know the city of Phoenix is gifting," Rogers said. She said the money should come from the private sector.
Childhelp receives a majority of its budgets from tax dollars, billing state agencies for foster care services, but donations, grants and direct government funding also account for millions of dollars in contributions.
But Childhelp officials said that because of the economic downturn of the Great Recession and a lack of earmarks that used to fund its projects, the organization can no longer afford to foot the bill for the Phoenix advocacy center itself.
"We don't have the resources to do that anymore," said Jim Hebets, who is the vice president of Childhelp's national governing board.
Critics like Greta Rogers, as well as former employees who spoke to CBS 5 Investigates on the condition of anonymity because of a fear of retribution from Childhelp's supporters, said the nonprofit could cure some of its money troubles by examining the compensation packages of its founders.
According to IRS filings, Sara O'Meara is the organization's chief executive officer, earning a salary of roughly $240,000 per year. Yvonne Fedderson is listed as the president and earns $250,000 per year.
According to a study conducted by the Arizona Republic newspaper, those salaries are in line with the salaries of other top executives in charge of similar-sized Arizona charities.
The tax filings indicate that the two work 40 hours per week. But the former employees told CBS 5 Investigates that O'Meara and Fedderson serve mostly as fundraisers and advocates and do not run the organization's day-to-day operations, as their high salaries would require them to.
Hebets disagreed. He said the founders worked for years without a salary, but after their husbands died, they needed to earn a paycheck.
"They started it with nothing. There were no children. There were no employees. And 55 years later, we have over 600 employees. We've served millions and millions of children. And they've built an organization that has survived," said Hebets.
The critics point to the founders' home as evidence they don't need the high salaries. The women, who have been friends for decades and whose husbands were also friends, live together in Fedderson's Paradise Valley estate. The Maricopa County Assessor's Office values it at just less than $5 million.
The IRS filings also show the founders and other governing board members and their families have loaned nearly $3.5 million to Childhelp. Hebets said the money was used to help Childhelp stay afloat during the recession, and he said Fedderson took a mortgage out on her residence to come up with her share.
"Sara and Yvonne and many other people in Childhelp had to make loans to Childhelp to survive," said Hebets.
But CBS 5 Investigates has learned that those loans carry interest rates that will benefit the founders and board members. Hebets said the interest rates are in line with the interest rates Childhelp pays to other lenders.
The former employees told CBS 5 Investigates that O'Meara and Fedderson's loans to Childhelp carry a rate of 10 percent.
Copyright 2014 CBS 5 (KPHO Broadcasting Corporation). All rights reserved.
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