The issue of charity pay has once again hit the headlines. However, this time it is not the issue of paying trustees that has raised its head above the parapet, but the level of pay given to charity CEOs. So is there an issue with charity CEO pay, or is this politically motivated?
This issue relates to an article in The Daily Telegraph that the number of chief executives, of charities making up the Disasters’ Emergency Committee, who receive six-figure salaries has increased by nearly 60% in the last three years. But the specifics have been overshadowed by the reaction to comments in the article made by William Shawcross, the chairman of the Charity Commission, who said that:
“It is not for the Commission to tell charities how much they should pay their executives. That is a matter for their trustees. However, in these difficult times, when many charities are experiencing shortfalls, trustees should consider whether very high salaries are really appropriate, and fair to both the donors and the taxpayers who fund charities. Disproportionate salaries risk bringing organisations and the wider charitable world into disrepute.”
Naturally, his comments have been seized upon and generated much debate, as well as some consternation. Sir Stephen Bubb, the chief executive of the charity leaders’ organisation ACEVO, called his comments “deeply unhelpful”, saying that CEO pay is “simply not an issue for donors. Donors are more concerned about the outcomes, the performance, and the efficiency of these organisations.”
Following the article and the various comments above, the issue has become politically marred, with Sir Bubb attacking right wing politicians saying they “hate effective charities” and dislike those “effective in raising concerns of the world’s poor”, whilst Priti Patel Conservative MP said that Sir Bubb had let his “left wing political views cloud his judgement.”
To me, the reactions are motivated by political stance rather than by the issue. The angle of the research and article, together with the various comments in response, naturally influenced by a person’s attitude and viewpoint, have allowed the comments of William Shawcross to be misinterpreted and the key issue in question to be overlooked, perhaps almost forgotten.
So is William Shawcross correct? Yes he is. Salaries must be appropriate and fair. And you know what? They are. Charity CEOs are responsible for over £61.1 billion of income per annum. They oversee the vast, varied and valuable services charities provide.
They are charged with generating funds, ensuring these are spent on achieving the charity’s aims, and for safeguarding the assets of the charity.
They must have and demonstrate great leadership, organisation, and skill. They bear enormous responsibility.
All of the above are key factors in determining remuneration levels. Salaries are, and should be, commensurate with the charity’s aims and activities, the duties of CEO, and with the level of income and expenditure.
There has been much debate in the sector in the last 12 months or so regarding the professionalism of the sector. It is a unique and wonderful sector, and during the recent times of austerity charities and their CEOs have had to draw on their vast experience and ability to ensure funding is obtained to carry out activities (and as I have previously discussed, income has continued to grow year on year).
Ultimately, as with anything in life, you get what you pay for. The sector needs to attract the top talent. One way of doing this is through remuneration. They should not compete with the private sector. But they do not try to.
It’s too easy to knock people, sectors, and organisations. And it’s all too easy to give an opinion from the side-lines and get a headline in a newspaper. Rather than deter people from coming to the sector, we should be doing the opposite – encouraging skilled and inspirational people to the sector and providing them with the opportunities to demonstrate their ability. The very things that charities themselves do for the wider world.
The information in this article was correct at the date it was first published.
However it is of a generic nature and cannot constitute advice. Specific advice should be sought before any action taken.
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