Charity boss spent 82 days at golf
Director gets $142k exit payment amid government investigation
A not-for-profit boss earning a $160,000 salary was given up to 16 weeks of paid leave each year to play golf, and was allowed to use charitable funds to pay for memberships at exclusive Auckland clubs, a government investigation has found.
A Charities Service investigation found Max Ritchie, the 79-year-old former executive director of the Neurological Foundation, spent up to 82 days a year on the golf course, on top of his statutory 20 days of annual holiday leave, after a long-running and informal arrangement with successive foundation chairmen.
Ritchie’s on-the-job golf-playing even eclipses that of famous working golfer Donald Trump who, according to media reports, has only spent about 40 days a year playing golf during his first term as US president.
The Neurological Foundation was established in 1971 to fund research into neurological conditions. According to its most recent filed accounts it has $75 million in assets, largely term deposit investments, and last year it raised $7.1m from public donations and bequests.
The Charities Service investigation was spurred by complaints, including from one staffer who claimed excuses had to be made when donors called while Ritchie was out on the greens, according to investigation notes.
“Evidence gathered from the [Royal Auckland and Grange] Golf Club strongly supports the allegation that [Ritchie] played golf extensively during the hours of the working week,” the service’s report said.
Documents dating from 2003 show Ritchie described the arrangement, whereby he was paid a regularly increasing bonus in paid leave instead of cash, was intended to avoid “the public relations barrier” of reporting payment of high salaries at charities. Ritchie also said the arrangement was “good for the NF budget and for my anti-tax principles”. In response to questions from the Weekend Herald, Ritchie stressed he was up-to-date with his tax obligations.
“I doubt that many people enjoy paying more tax than they need to. I believe that everyone should pay their fair share.”
Ritchie defended his salary and leave package, saying he was a fulltime chief executive and during his 23-year tenure annual research funding increased from $350,000 to $3 million.
“The team at the [foundation] achieved a great deal during my time and I am proud to have played a part,” he said.
Ian Robertson, the foundation chairman at the time, told investigators he had “inherited” the generous informal golfing leave arrangement from the prior chair.
According to interview notes, Robertson “considered it acceptable at the time but did not really think about it until January when [Charities Service] Investigation made him look at it and say that’s not right”. The leave provision was terminated at the start of 2017.
The investigation also canvassed a three-month trip by Ritchie and his new wife to the United States, Scotland and Canada in 2015 that cost the foundation $18,000. Complainants described the trip as a foundation-paid “honeymoon”, a description Ritchie rejected as “ludicrous”, and saying the foundation only contributed $5000 towards its cost.
The balance was deducted from his leave and he attended work conferences in “cold and wet” Edinburgh and Baltimore.
Then deputy-chair Tony Offen conceded, of the 2015 international travel, that “it was hard to quantify that there was $18k of value added to the [Neurological Foundation].”
In July 2018, the Charities Service, after a lengthy investigation, wrote to the foundation stating the affair did not qualify as corrupt, but was evidence of “gross mismanagement”.
However, contemporaneous developments — including the resignation of Ritchie, the former chairman and another senior staff member whose conduct was the subject of complaints — meant it could retain its charitable status and its findings would not be published.
The Weekend Herald obtained the report, and several hundred pages of investigation notes, under the Official Information Act.
Ritchie denied his departure was hastened by the investigation.
Shortly after his resignation, Ritchie commented on a blog that: “We now have the Charity Services division of Internal Affairs, the former Charities Commission, which imposes corporate responsibilities on charities’ officers, but of course they do not get corporate rewards.”
The foundation’s current chief executive Rich Easton and chairman Dr Barry Snow declined to be interviewed.
In a written statement in response to questions, Snow said: “The foundation acknowledged in the years prior to 2017 the organisation outgrew its management and governance processes and its leadership model was no longer fit for purpose.”
While praising Ritchie for leading the foundation “through a remarkable period of growth”, Snow said: “We have now changed almost every aspect of governance. Donors and public can have confidence that the foundation is managing its funds properly.”
Ritchie’s benefits package also included a $5000 annual “association and clubs allowance,” whereby the foundation paid for his membership at the Royal Auckland and Grange Golf Club, believed to be Auckland’s most expensive golfing fraternity.
In response to questions from the Weekend Herald, Ritchie said this membership only cost the charity $3000 a year, and the remainder of his allowance was used to pay his fees at the city’s exclusive Northern Club.
In early 2017, while the Charities Service investigation was nearing completion, the foundation and Ritchie reached a confidential agreement that public accounts show resulted in the former executive director being paid $142,207 in “retirement benefits” after his departure.
Ritchie said he was unable to discuss the exit payment because of a confidentiality clause.
Snow also said he was unable to discuss the payout, “but we can confirm all payments were consistent with contractual and holiday entitlements”.
In the 2015 Queen’s Birthday honours list, Ritchie — a former solder who served in Borneo and Vietnam before refashioning himself as a charitable executive — was made a Companion of the New Zealand Order of Merit for services to health and charity, largely as a result of his work at the foundation, which he had headed since 1994.
In correspondence with his board in 2015 — while the Charities Service was conducting its probe — Ritchie talked up his own frugality: “Other people’s money is the easiest to spend and I keep a tight lid on costs.
“I observe the travel and other expenditure of many of my colleagues in the charity field with horror.”
In 2010, in discussions around who should succeed him at the foundation, Ritchie had the following advice for his board: “He should treat it like ‘he was spending his own money’.”
A spokesperson for Internal Affairs said they were satisfied with how they handled the matter: “This case highlighted the importance for good governance in the charitable sector.
“In this case we identified shortcomings in oversight by the governance board and record keeping, particularly around benefits to senior management.”