In his crusade against racial preferences, Ward Connerly portrays himself as fighting a political power structure financially vested in the status quo, but there's a flip side: He's making big bucks himself.

Connerly earned more than $700,000 last year -- quadruple the salary of Gov. Gray Davis -- from two nonprofit organizations he created years ago to fight racial favoritism, records show. In the four years ending June 2002, he made $2.1 million, according to tax records.

Connerly's crusade, which began eight years ago as a challenge to admission policies at the University of California, has grown into a multimillion-dollar business that has given him national renown and spawned his autobiography: "Creating Equal: My Fight Against Racial Preferences."

Connerly's earnings from his two Sacramento-based nonprofit groups -- the American Civil Rights Institute and the American Civil Rights Coalition -- have become a lightning rod for critics of his new campaign to bar California agencies from collecting racial data.

"I think Connerly sponsors initiatives for the same reason General Motors sells cars -- it's his business," said Larry Grisolano, political consultant for a coalition opposing his new initiative. "He makes money by being in the limelight and working the speakers circuit."

Connerly calls such attacks a smoke screen designed to defeat without debating the merits of his ballot initiative, scheduled to appear before voters in the next statewide election.

"No, it's not fair, but that's the way campaigns are run," he said. "Once you get involved, you're putting yourself on the line. ... That's the only way they can beat this."

Connerly received $314,079 in salary last year from the two nonprofits, plus $407,009 in speaking or consulting fees, and $15,000 in fringe benefits. He also was reimbursed $174,354 for travel or other expenses, records show.

Sales of Connerly's autobiography got a big boost from his nonprofit institute, which paid $43,639 to purchase the publication in bulk to give to major donors in fiscal 2000.
Assemblyman Fabian Nuñez, D-Los Angeles, accused Connerly of creating a "race-baiting type of atmosphere" for selfish gain.

"Clearly, the objective here isn't to create a colorblind society but to promote Mr. Connerly," he said.

Public policy nonprofits vary widely, so comparing their top pay with Connerly's $314,000 base salary is difficult. Many such groups are much larger than Connerly's two nonprofits, which share a downtown Sacramento office and a staff of three full-timers and three part-timers.

The Claremont Institute, for example, pays its top executive $130,000 per year to manage an 18-person staff. The Public Policy Institute of California pays its leader $357,000 to oversee 72 employees, and the conservative Heritage Foundation pays its head about $292,000 to supervise a 185-person staff based in Washington, D.C.

Nationwide, the nonprofit industry has no salary-setting formula. Top pay is determined by type of organization, size, function, annual revenue and other factors, including pay for comparable duties in the private sector, nonprofit officials said.

Connerly's personal earnings account for about 30 percent of the roughly $7.2 million in total revenues received by his two nonprofits since 1999.

One of Connerly's groups, the civil rights coalition, has almost single-handedly financed his initiative drive thus far, contributing more than $1.57 million of the $1.82 million collected by the campaign through December 2002, records show.

In a complaint to the Fair Political Practices Commission last year, numerous public interest groups -- including California Common Cause and the League of Women Voters -- demanded disclosure of the names of those who have donated to the initiative through Connerly's coalition. The FPPC has not yet ruled.

Connerly, a man of mixed ancestry who has been subjected to vicious personal attacks for his activism, laughs at the notion that he's milking the system for personal gain.

If he were trying to perpetuate his nonprofit groups, Connerly said, it would make little sense to push for elimination of the kind of racial data that sparked their creation.

"I'm trying to work myself out of business," he said, laughing.

Connerly said "this was not a job-seeking enterprise" but that he had two options once his views on racial preferences sparked controversy.

"I could retreat from the arena or defend my position," he said. "I chose the latter."

Connerly said he uses roughly half his salary from the nonprofit groups -- not counting speaker compensation -- to reimburse a consulting firm he owns, Connerly & Associates, that handles land development, association management and housing matters.

Connerly said the reimbursement is necessary because he often seeks advice or requires assistance from colleagues of his land-use staff. He subsequently repays his firm for time lost.

State law does not require him to publicly disclose the extent of such reimbursement.

In addition to his political activities and business management, Connerly, 64, serves as a regent of the University of California.

Connerly said his activism consumes much of each day and forces him to travel extensively, sometimes four or five days a week, taking time from his family and biting deeply into profits he could have made at Connerly & Associates.

Connerly called his social activism a passion, not a financial necessity, but said he deserves to be compensated for his time and expense like any other nonprofit executive.

"Should (I) have to do that for free?" he asked. "Does anybody have to do what they believe in and donate it all to the cause? No. ... Martin Luther King did not have to vow poverty in order to do what he did."

Connerly said his salary from the civil rights coalition and institute cannot, by law, be excessive in comparison to similar groups.

Connerly's salary is based on accountants' recommendations that are approved by the groups' joint governing board, he said.

The board has consisted only of Connerly and Thomas Rhodes of New York the past few years, but it recently was expanded, Connerly said.

Connerly worked an average of 40 hours per week for the nonprofit institute during the 2002 fiscal year, and an additional 20 hours per week for the civil rights coalition, according to state records.

Connerly's nonprofit groups are organized under separate sections of federal tax law, giving them different capabilities: The coalition, a 501(c)4, may contribute to and participate in political campaigns -- and has done so in California, Florida and Washington state. The institute, a 501(c)3, can engage in educational or charitable activities, but not political campaigns or substantial lobbying.

Connerly said he doesn't earn a penny extra for promoting his new California initiative. His salary would be the same regardless, he said.

"If I were smart, if I were doing it just for the money, I'd say, hell, don't get involved in initiatives because they drain money that otherwise would go to the institute," he said.

Grisolano counters that Connerly profits indirectly from his new initiative, however, because the controversy it generates increases Connerly's name recognition and value as a speaker.

Connerly first attracted the public spotlight in 1995 by helping to overturn UC policies that considered race in granting admissions.

In 1996, he campaigned for Proposition 209, a landmark initiative that barred race and gender preferences in public education, hiring and contracting.

Connerly's new initiative would prohibit government agencies from compiling and maintaining race-based data, with several exceptions, including medical research.

In arguing for his measure, Connerly has blasted government and special-interest groups that he contends have a vested interest in maintaining the status quo. "All they want is to spend, spend, spend more on their mountain of data while California goes down the tubes," he said recently.

Abdi Soltani, executive director of Californians for Justice, a group opposing the initiative, said that Connerly's complaints about vested interests make his own earnings a legitimate issue.

Becky Norton Dunlop, of the Heritage Foundation, said Connerly's compensation should not be a big issue, because the money comes from voluntary donations -- not public funds -- by "people who are free to donate to causes they believe in."

"Most people who donate to causes such as this, that are controversial, recognize that talented and effective leaders must be compensated or they'll find other ways to make a living," she said. "His speaking skills and his willingness to speak out on the issue have had national impact."