How a Nonprofit CEO Got Paid $1.6 Million in Two Years—And Why People Are Asking Questions

The Big Picture: What Happened?

Imagine a charity that helps people escaping domestic violence and homelessness. It gets almost all its money from taxpayers—you and me. Now imagine the person running that charity lives 2,500 miles away in Hawaii and got paid over $1.6 million in just two years.

That’s exactly what happened at 1736 Family Crisis Center, a nonprofit in Southern California. Their CEO, Carol Adelkoff, received:

• $907,923 in 2023 (including a $495,000 bonus)
• $742,181 in 2024

That’s several times more than leaders of much larger nonprofits doing similar work.

Why Was Her Pay So High?

The "Vacation Payout" Explanation

Adelkoff says the huge numbers aren’t her regular salary. Her base pay has been around $405,000/year. The spike came from cashing out 40 years of unused vacation time.

She says: “It was simply a matter of reducing accrued vacation liability on the books and paying it out.”

How Much Vacation Are We Talking About?

• The board allowed her 8 weeks of vacation per year as CEO (reduced to 4 weeks in 2012).
• No cap on how much she could save up—unlike every other employee.
• Over decades, this added up to roughly $824,000 in vacation payouts over two years.

Important Points: Why Experts Are Concerned

This is highly unusual. Here’s why nonprofit experts are raising eyebrows:

• Almost no other nonprofit allows unlimited vacation accrual.
  97% of California nonprofits cap vacation (usually at 1.5× annual allowance).

• Vacation payouts usually happen when someone leaves a job—not while they’re still working.

• The numbers are “stunningly large,” says Marc Owens, former head of the IRS nonprofit division.

• The nonprofit gets 94% of its $15M budget from taxpayer money.
  That means public funds paid for this.

• Adelkoff has lived in Hawaii since at least 2002—raising questions about hands-on leadership.

How Does This Compare to Other Nonprofits?

Bottom line: Adelkoff earned 2–4× more than CEOs running much bigger organizations.

Who’s Watching the Store? (The Board)

Nonprofits are overseen by a board of directors—volunteers who make sure money is spent wisely. But at 1736 FCC:

• Board President Ron Troupe has served since at least 2000 (25+ years).
• Five board members have served 14+ years over the last two decades.
• Troupe gets paid $30K–$97K/year—very rare for a board member.
• The board refused to share meeting minutes or the compensation study they claim to have done.

Experts say: Long-serving, paid board members lose independence. It’s hard to oversee a CEO when your own paycheck depends on them.

The Rules: What’s “Reasonable” Pay?

• IRS rule: Nonprofit pay must be “reasonable”—based on what similar orgs pay.
• California law (Nonprofit Integrity Act): Boards must ensure CEO pay is “just and reasonable.”
• But there’s no hard cap or formula. It’s up to the board to prove they did their homework.

The board says they compared pay with similar nonprofits—but won’t name which ones or show the data.

A Timeline of Key Events

1. 1984 – Adelkoff becomes CEO; budget is $200,000.
2. 1985 – Org opens what it calls the first transitional shelter for women fleeing abuse in the U.S.
3. 2002 – Adelkoff moves to Hawaii; board asks her to stay on as CEO.
4. 2005 – Board President Troupe starts receiving a salary.
5. 2012 – Adelkoff’s annual vacation accrual cut from 8 to 4 weeks.
6. 2018 – California League of Cities honors Adelkoff.
7. 2023 – Adelkoff paid $907,923 (incl. $495K bonus/vacation payout).
8. 2024 – Adelkoff paid $742,181 (incl. $329K vacation payout, per amended filing).
9. 2025 – LA Times investigation published; experts call for regulator review.

What Happens Next?

• Adelkoff says she has no more vacation time left to cash out.
• Future tax filings should show her pay returning to ~$405,000.
• Regulators (IRS, CA Attorney General) may review the filings.
• Donors and grantmakers (like LA Homeless Services Authority, which gave $25M+ since 2021) may ask questions.

Summary: What You Need to Know

• A taxpayer-funded nonprofit paid its CEO $1.6M in two years—far above peers.
• The spike came from decades of uncapped vacation accrual, allowed only for her.
• Experts call it “highly unusual” and “stunningly large.”
• The board is long-serving, includes a paid president, and won’t share records.
• Rules exist but are vague—“reasonable” is in the eye of the board.
• Public trust matters: When charities use tax dollars, transparency is everything.

FAQ: Your Questions Answered

Is it illegal for a nonprofit CEO to be paid this much?

Not necessarily. The IRS requires pay to be “reasonable” compared to similar organizations. But there’s no fixed limit. If regulators decide it’s unreasonable, the nonprofit could face penalties or lose tax-exempt status.

Can a nonprofit board pay its own members?

Yes, but it’s rare and frowned upon. Most boards are 100% volunteers. Paying a board member—especially the president—creates a conflict of interest because the board is supposed to oversee spending, including their own pay.

Why does it matter that she lives in Hawaii?

Running a community-based nonprofit with 16 shelters, 170 staff, and 24/7 crisis services usually requires on-the-ground presence. Fundraising, site visits, and staff leadership are harder from 2,500 miles away. Experts question if this adds travel costs or reduces effectiveness.

What is “accrued vacation liability”?

It’s accounting language for “money the organization owes employees for unused vacation time.” If an employee earns vacation but doesn’t take it, the org has a debt on its books. Paying it out reduces that debt—but usually happens at retirement, not mid-career.

Who can investigate this?

• IRS (reviews nonprofit tax forms for “reasonable compensation”)
• California Attorney General’s Registry of Charitable Trusts (enforces state nonprofit laws)
• LA Homeless Services Authority (major funder—can audit or reconsider grants)
• Media and public pressure (which already triggered this scrutiny)

This article is based on reporting by the Los Angeles Times as part of their equity reporting initiative, funded by the James Irvine Foundation.