The Big Payday: How a Nonprofit CEO Got Paid Millions While Living in Hawaii

What Happened? (The Short Version)

Imagine a charity that helps people escaping domestic violence and homelessness. It gets almost all its money from taxpayers (that’s you and me). Now imagine the boss of that charity gets paid over $1.6 million in just two years — while living 2,500 miles away in Hawaii. That’s exactly what happened at 1736 Family Crisis Center in Los Angeles.

Important Point: This nonprofit gets 94% of its money from government grants — meaning public tax dollars pay for these salaries.

Who Is Involved?

The Organization

• Name: 1736 Family Crisis Center
• What they do: Run domestic violence shelters, crisis hotlines, and homeless programs
• Locations: 16 facilities across LA and Orange Counties
• Staff: About 170 employees
• Annual budget: ~$15 million (mostly taxpayer money)

The CEO

• Name: Carol Adelkoff
• Role: Chief Executive Officer since 1984 (40+ years!)
• Home base: Big Island, Hawaii (since at least 2002)
• Claim: Works 70 hours/week remotely

The Board of Directors

• Job: Oversee the CEO and make sure money is spent wisely
• President: Ron Troupe (on board 25+ years, gets paid $30K–$97K/year)
• Most members: Served 14+ years (unusual for nonprofits)

The Money Breakdown: Where Did $1.6 Million Go?

2023 Tax Filing (Filed in 2025)

2024 Tax Filing (Latest Public)

Two-Year Total: $1,650,104

Important Point: Her base salary never changed (~$405K). The huge jumps came from vacation payouts and a bonus.

Why Was the Pay So High? The "Vacation Bank" Explanation

The CEO’s Story

Adelkoff says:

• She never took vacation for 40 years because the work was too demanding
• She earned 8 weeks vacation/year (later reduced to 4 weeks)
• No cap on how much she could save up (other staff do have caps)
• The payout was just "reducing accrued vacation liability on the books"

What Experts Say

Important Point: 97% of California nonprofits CAP vacation accrual (usually at 1.5x annual amount). This nonprofit did not cap the CEO’s vacation.

Typical Nonprofit Vacation Cap Example:

1. You earn 3 weeks/year (120 hours)
2. Cap = 1.5 × 120 = 180 hours (4.5 weeks max)
3. Once you hit 180 hours, you stop earning until you use some

Adelkoff’s Situation:

• No cap for 40 years
• Accrued ~$824,000 in vacation value
• Paid out while still working (not retiring)

How Does This Compare to Other Nonprofits?

Important Point: Adelkoff made 2–5x more than CEOs running much larger organizations with more revenue.

The Red Flags Experts See

1. Board Oversight Problems

• Board president gets paid (most nonprofit boards are all volunteers)
• Same board members for 14–25+ years (no term limits)
• Board won’t share meeting minutes or compensation studies

2. Remote Leadership Questions

• CEO lives in Hawaii, runs LA shelters
• 2,500 miles away, different time zone
• Won’t say how often she visits or who pays for travel
• Other nonprofit CEOs say on-site presence matters for:
  • Fundraising events
  • Visiting shelters
  • Meeting staff and clients
  • Understanding day-to-day operations

3. Unusual Financial Practices

• Vacation payout while still employed (not at retirement)
• No vacation cap for CEO only
• Bonus exceeded base salary in 2023
• Revenue dropped in 2023 ($13M) but CEO pay doubled

What the Rules Say (And Don’t Say)

IRS Rules

• Pay must be "reasonable"
• Should compare to similar organizations
• No specific dollar limits

California Law (Nonprofit Integrity Act, 2005)

• Board must ensure pay is "just and reasonable"
• No specific numbers or caps
• No term limits required for board members

The Gap

Important Point: No hard rules on dollar amounts. It’s based on "comparisons" — but this board won’t show who they compared to.

What Happens Next?

The Nonprofit Says:

• 2024 filing being amended to show vacation payout clearly
• No more accrued vacation left to pay out
• Future pay will return to ~$405K base
• Next tax filing (2025) won’t be public until 2026

Experts Predict:

• IRS/regulators will likely ask questions
• Former IRS official: "There’s a lot that would be of interest to a regulator"
• CharityWatch: "Highly unusual" — "How was this decision made?"

Summary: The Big Picture

1736 Family Crisis Center does important work helping domestic violence survivors and homeless people. But its financial practices raise serious questions:

The core issue: Taxpayer money funds this nonprofit. The public deserves transparency about whether executive pay is reasonable — especially when it’s 2–5x higher than peers running larger organizations.

FAQ: Your Questions Answered

Is it illegal for a nonprofit CEO to make this much?

Not necessarily. The IRS only requires pay to be "reasonable" based on comparisons. But regulators can investigate and impose penalties if they find it excessive.

Why does the board president get paid?

Most nonprofit boards are 100% volunteers. Paying a board member (who isn’t staff) creates a conflict of interest — they oversee the CEO and their own pay.

Can a CEO really work 70 hours/week from Hawaii?

Maybe on paper. But nonprofit experts say community-based work requires physical presence — visiting shelters, attending fundraisers, supporting staff. Two other LA nonprofit CEOs said remote work makes this much harder.

What does "accrued vacation liability" mean?

It’s accounting talk for: "Money we owe employees for unused vacation time." Like a debt on the books. Paying it out reduces that debt.

Where can I see this data myself?

Nonprofit tax forms (Form 990) are public records. You can search them at:

• ProPublica Nonprofit Explorer: projects.propublica.org/nonprofits
• IRS Tax Exempt Organization Search: apps.irs.gov/app/eos

This article is based on reporting from the Los Angeles Times equity reporting initiative, funded by the James Irvine Foundation.