DeMint rakes in Heritage cash

The Heritage Foundation’s annual revenue grew by 31 percent during former Sen. Jim DeMint’s (R-S.C.) first year as the conservative think tank’s president.

That dramatic increase was fueled by a $25.9 million contribution from an unnamed donor, according to a copy of Heritage’s 990 tax form covering fiscal 2013 obtained by The Hill.

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Heritage revealed in a September press release that it received $26 million from the family of Kathryn and Shelby Cullom Davis, who was a member of its board of trustees from 1979 to 1992. 

Heritage’s expenses totaled $80 million last year compared to $82 million in 2012.

DeMint received $614,000 in compensation in 2013 from Heritage, including his $380,000 base salary and a $200,000 bonus, according to the tax document.

When the Republican announced his resignation from the Senate in 2012 to become president of Heritage, it was reported at the time that he would likely earn $1 million.

DeMint, however, did not take over as president until April of 2013, so the compensation reported in the tax return does not reflect his current salary as president. Still, it’s a significant jump from the $174,000 he received annually in the Senate.

Edwin Feulner Jr., the organization’s outgoing president who led Heritage for 36 years, received $3.5 million in compensation in 2013, a figure that could raise eyebrows among the think tank’s critics.

Feulner earned a 2013 base salary of $181,000 and a $700,000 bonus for his service as the think tank’s president in 2012. He also received $2.52 million from a deferred compensation plan into which he contributed $865,000 from 1980 to 2006. The plan accrued $1.66 million in investment earnings. He continues to serve as chairman of Heritage’s Asian Studies Center. 

Tom Medvetz, a professor at the University of California at San Diego, who has studied and written a book about Washington think tanks, said Feulner’s compensation level was notable.

“It strikes me as much higher than normal but Heritage itself is more financially successful. They’ve been better at raising money than probably any think tank over the last forty years,” he said. “Many think tanks consider themselves as businesses.”

He said that while think tanks are nonprofit organizations, they engage in the entrepreneurial game of attracting sponsors.

The Heritage Foundation is classified as a charitable organization under section 501(c)(3) of the tax code.

Ken Berger, the president and CEO of Charity Navigator, said the compensation levels at Heritage are significantly higher than at other charities.

Charity Navigator’s study of charity CEO compensation released in October 2013 found the median salary of 110 large charities in the Mid-Atlantic was $268,000.

“The Heritage Foundation may not be the highest but it probably has the second-highest salaries that we see for that type of charity,” said Berger.

Heritage’s 990 form explains that salaries, bonuses and benefits for the president and senior management are authorized by an independent board of trustees and based on the recommendation of a compensation committee. That panel is made up of five independent, volunteer board members who have never served as employees of the foundation.

Senate Republican Leader Mitch McConnell’s (Ky.) wife, Elaine Chao, who served as secretary of Labor under former President George W. Bush, received $267,000 as a distinguished fellow at Heritage.

Former Sen. Jim Talent (R-Mo.) also received $191,000 as a distinguished fellow.

Heritage Action for America, the advocacy arm of Heritage classified under section 501(c)(4) of the tax code, has battled with GOP congressional leaders over a variety of issues, including the Export-Import Bank and last year’s government shutdown showdown over ObamaCare funding, in recent years.

While Heritage Action’s fundraising isn’t reflected in the Foundation’s financial uptick, the group’s influence in politics and policy since DeMint — a longtime thorn in GOP leadership’s side — took over its parent group has noticeably grown. That increased political involvement has fostered intense criticism from many Republicans. 

“Heritage used to be the conservative organization helping Republicans, and helping conservatives and helping us to be able to have the best intellectual conservative ideas,” Sen. Orrin Hatch (R-Utah) said last year just after the government reopened. “There’s a real question in the minds of many Republicans right now, and I’m not just speaking for myself: Is Heritage going to go so political that it really doesn’t amount to anything anymore?”