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The big business of housing immigrant children

As Juan Sanchez tells it, he spent years as the underpaid leader of the non-profit that is now providing housing to migrant children who were recently separated from their parents.

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Drew Griffin (CNN Investigations)
(CNN) — As Juan Sanchez tells it, he spent years as the underpaid leader of the non-profit that is now providing housing to migrant children who were recently separated from their parents.

His salary at Southwest Key Programs Inc. was low, he said, and there was no health insurance or retirement plan.

But those days are over.

According to recent tax filings, Sanchez received nearly $1.5 million in total compensation in 2016 as CEO of the non-profit he founded more than 30 years ago. His salary nearly doubled from the year before, when he was paid $786,822.

Sanchez's salary among the highest for charities

Charity watchdogs say Sanchez seems to be richly compensated.

"The salary is extraordinarily high for a charity, even a large charity," said Marcus Owens, the former head of the Internal Revenue Service division that oversees nonprofits. Nonetheless, he said, a non-profit organization's board has the right to determine its president's salary.

Daniel Borochoff, the president of CharityWatch, said although his group does not follow Southwest Key because most of its money comes from government contracts, it would be the fifth-highest CEO salary when compared to the more than 600 US charities his organization ranks.

"The head of the American Red Cross receives a $600,000 salary," Borochoff said in comparison. "It's a multi-billion dollar charity. They control half of our blood supply, lead disaster provider. You've got this charity [Southwest Key], the budget is like a tenth of [the Red Cross's] size."

By many accounts, Southwest Key does good work providing safe housing to unaccompanied minors, though it has been cited in the past for some violations. It is one of the larger non-profits that provides care and housing to migrant children in US custody. Over the past 10 years, the organization has received about $1.5 billion for operating 83 programs across the country that include shelters for migrant children and youth justice initiatives.

This year, it is slated to take in about a half billion dollars in federal contracts.

In an interview with Austin's KLRU-TV, Sanchez said President Donald Trump's zero-tolerance border policy left him inundated with children.

"We never imagined that we would have this many kids, that we would see the kind of policies we see now," Sanchez said. "The ultimate goal for us is, how do we reunify these kids with their families?"

Salary within reasonable range, rep says

A spokesperson for Southwest Key told CNN in an email that Sanchez's salary is within a reasonable range.

"The Board of Directors determines Dr. Sanchez's salary based on a percentage of Southwest Key Programs' annual revenue compared to other nonprofits. An analysis is done annually comparing Dr. Sanchez's salary as a percentage of revenue to CEOs of other nonprofits that provide similar services as well as nonprofits of comparable size based on revenue," the spokesperson said.

Southwest Key provided CNN a list of salaries for 40 nonprofit CEOs that it said justified Sanchez's compensation level. Sanchez had the third-highest compensation on that list, behind the CEO of Memorial Sloan-Kettering Cancer Center, who makes $6.7 million, and the director of New York's Museum of Modern Art, who makes nearly $2.2 million.

Among non-profits as large as Southwest Key and operating under a similar classification, CNN found Sanchez is paid among the very top.

According to his online biography, Sanchez grew up in a poor neighborhood in south Texas and went on to earn a doctorate from the School of Education at Harvard University.

Sanchez was paid about $127,000 in 1997. Almost every year since, except for 2004 and 2005 when tax filings income information was left blank, his salary has increased.

Sanchez did not respond to CNN's requests for an interview. But he defended his salary in the KLRU interview.

"When we started, we started with nothing, very low salaries, no health insurance... Over time our board had got to the point where they said we are now at a position where we can pay you a decent salary and give you some good retirement packages," he said.

Sanchez's wife, Jennifer, also receives a salary from Southwest Key.

Documents show Jennifer Sanchez's total compensation was $280,819 in 2015 for her role as vice president of Southwest Key.

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