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At Fire Protection Association, nonprofit doesn’t mean low pay

James M. Shannon, president, National Fire Protection Association, in 2011.Yoon S. Byun/Globe Staff/Boston Globe

Charity work pays well at the nonprofit National Fire Protection Association in Quincy.

When James M. Shannon retired in 2014 as president and chief executive officer, he left with an eye-popping $4.1 million in earnings. Not bad for a former Democratic congressman and state attorney general whose pay in those jobs was a small fraction of the $10.5 million he earned in 12 years as the nonprofit’s president.

Earnings for the association’s chief financial officer, Bruce H. Mullen, hit $1.2 million in 2014, federal financial filings show. Another executive got nearly $560,000.

The organization defended the compensation packages, which made Shannon and Mullen two of Massachusetts’ highest-paid nonprofit executives in 2014.


The 121-year-old National Fire Protection Association has saved untold lives from Boston to Bangladesh, the association noted, and developed standards that have made it the global authority on fire, electrical, and life safety codes.

The association has amassed a $207 million surplus since 2001 that would be the envy of many for-profit businesses — businesses that would have to pay taxes. But it is not a business. As a public charity, the association has potentially saved millions of dollars in federal and state taxes through its tax-exempt status.

An association spokeswoman said the 2014 totals for Shannon and Mullen are misleading because they included lump sum payouts from pension benefits accrued over decades. The spokeswoman said executive pay matches compensation at similar organizations.

“We run like a business and therefore, hire and compensate the right people to run an effective operation,” said association spokeswoman and vice president Lorraine Carli. “We have a funding strategy that allows us to deliver on our mission of eliminating loss from fire and other hazards now and well into the future.”

In 1984, US Representative James M. Shannon made an appearance at Copley Plaza in Boston. Globe Staff file

No one disputed the nobility of the association’s work. The guidebooks and training manuals it publishes are recognized as the bibles of the industry, and government agencies — federal, state, and local — spend millions of taxpayer dollars buying them.


But charity watchdogs said compensation at the National Fire Protection Association appeared to be at odds with the Internal Revenue Service requirement that nonprofit pay be reasonable.

“It seems very, very high,” said Fred K. Foulkes , a professor and director of the Human Resources Policy Institute at Boston University. “There are nonprofits much, much larger that pay a lot less.”

The watchdog Charity Navigator tracks financial data on 8,000 nonprofits that solicit donations. That makes most of them different from the fire protection association, given its primary revenue source — selling training manuals, code books, and other publications. Tens of millions of dollars of those sales were to taxpayer-funded government agencies.

Because the association’s financial model differs from many nonprofits, it’s difficult to make an exact comparison. But the executive pay of those other organizations can provide some context, said Sandra Miniutti, Charity Navigator’s vice president.

The Charity Navigator data show that nonprofits of a similar size and scope as the fire protection association paid their presidents $300,000 to $400,000 in annual salary and bonuses, not including deferred compensation and retirement benefits, Miniutti said. But the high pay at the National Fire Protection Association continued even after Shannon left. The new president earned $650,000 in salary, bonus, and other compensation and benefits in 2015, according to federal filings. That does not include another $66,000 retirement benefit.


“That seems unusual based on my personal experience. It seems high,” Miniutti said. “The Red Cross is paying [its national president] just over a half-million dollars and that’s a $3 billion operation.”

The fire protection association conducts a review every three years to compare pay with similar organizations, according to the spokeswoman, Carli. The association would not provide the Globe its most recent study, from 2015, and would not identify the organizations it used for comparison.

Other fire association executives declined to comment or discuss their salaries.

Shannon, the retired chief executive, did not respond to a phone message seeking comment. In Congress, he was a protege of Thomas P. O’Neill Jr. when he was House speaker. Shannon ran for Senate in 1984 but lost in the Democratic primary to John F. Kerry. He then served a term as state attorney general, a role in which he regulated public charities.

After leaving office in 1991, Shannon joined the fire prevention association. His pay package upon retirement in 2014 included a half-year’s salary of $220,000, a bonus of $206,000, and a retirement benefit worth $181,000, filings show.

What made Shannon one of the state’s highest-paid nonprofit executives was $3.3 million in deferred compensation he earned over his career. The payout vaulted his total to $4.1 million.

At the association, Shannon and his successor both served on the committee that set their pay, according to the organization’s website. Carli said the president does not participate in discussions about his own compensation. Charity watchdogs said the arrangement was inappropriate.


The association defended the pay received by executives, saying its unusual model — relying on sales, subscriptions, and membership dues, instead of donations — requires unusual talent.

“In order to be a self-funded organization, we want to be able to attract and retain top professionals committed to our mission,” Carli said. “We’re financially sound because we’re a well-run organization.”

The association has cornered a niche market: In 2015, the publishing behemoth sold $41 million worth of code books, reference materials, guides, and training manuals.

The fire protection association’s electrical code, for example, is used in all 50 states. That means code books and other resources are purchased by electricians, builders, architects, engineers, and government agencies across the country.

The organization would not say how much of its sales and subscriptions are to government agencies that use tax dollars to pay. But records show that since 2010, the City of Boston has paid the association $94,000. The state of Massachusetts has paid at least $220,000. The federal government’s tab was at least $17.9 million, according to a government website that tracks federal spending.

Global demand for the association’s work may explain why the roughly 325-employee organization looks more like a thriving for-profit corporation than a tax-exempt nonprofit.

The association owns a leafy 50-acre, four-building campus on a rocky knoll near the Blue Hills with an assessed value of $51 million. The headquarters occupies a red brick structure with a soaring atrium and an indoor koi pond. A brochure marketing the other buildings to prospective tenants describes a “first-class office park” with three full-service cafeterias, fitness center, manned security, and a conference center.


Considering the association’s prosperity, Foulkes, the Boston University professor, asked, “Why are they a nonprofit?”

The description of tax-exempt organizations in IRS code includes associations that work to improve public safety.

“The work that is being done is in the public interest,” Carli said. “We provide a tremendous service to individuals, companies, governments of all sizes. . . . Building, electrical, and life safety standards keep the public safer.”

Andrew Ryan can be reached at