Tax filings reflect that Dairy Management, Inc., an Illinois-based nonprofit organization, paid its retiring leader, Thomas Gallagher, $1.7 million in retirement compensation. Dairy Management, Inc. is organized as a 501(c)(6) nonprofit organization under the IRS tax code, meaning, it is primarily supported by people and companies with an interest in a specific industry versus by contributions from the general public. Dairy Management, Inc.’s stated mission, according to its 2023 tax filing, is “To invest dairy producer checkoff funds in strategic, coordinated marketing programs designated to increase consumption of dairy products both domestically and internationally.”

Dairy Management, Inc.’s dairy checkoff program requires participating dairy farmers nationwide “to pay 15 cents per hundred pounds of milk sold, or about 12 gallons,” according to The Milwaukee Journal Sentinel (The Sentinel), which reported on the retirement payout in its recent article, “Dairy Management ex-CEO Paid $1.7 Million After He Retired. Wisconsin Farmers Helped Pay Him.“

CharityWatch CEO, Laurie Styron, spoke with The Sentinel for the article, saying that farmers who are represented by Dairy Management should be made aware of the salaries.

“‘A nonprofit’s stakeholders shouldn’t be blindsided with a seven-figure severance payout to its leader,’ Styron said. ‘When someone is making a purchase of any kind they consider the cost of what they are buying relative to the value they are receiving in exchange.'”

Tax filings reflect that Thomas Gallagher retired from Dairy Management, Inc. as its top executive in November 2021 and went on to collect two more years of pay, paid in four installments of about $425,000 each, as part of his retirement agreement.

The Sentinel reported that “Gallagher’s pay package was valued at $2.68 million in 2021, according to a filing with the Internal Revenue Service by Dairy Management. His compensation was $850,000 the following year, and $425,000 in 2023, the most recent year that records are available to the public. The 2023 form was filed with the IRS in November 2024.”

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