When charity chiefs are worth six figures

Either as much money as possible should be used for the frontline activities of charities because that's why they exist. Picture: Greg Mcvean
Either as much money as possible should be used for the frontline activities of charities because that's why they exist. Picture: Greg Mcvean
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There are arguments for and against paying high salaries to top charity employees, but as in all companies, some will earn it, says Lesslie Young

William Shawcross, the chairman of down south’s Charities Commission, cautioned that high salaries for charity executives risked bringing organisations and the wider charitable world into disrepute.

William Shawcross. Picture: Getty

William Shawcross. Picture: Getty

His comments concerned highly paid senior staff in those very large charities whose turnover runs into the tens or hundreds of millions and who employ thousands of staff in the UK and abroad. He prompted responses from some quarters that framed the terms of the disrepute about which he had warned.

Mr Shawcross is reportedly paid £50,000 per year for his two days a week public sector role. Were he full time his salary would propel him into the six figures for which some charity chief executives have been criticised but that doesn’t preclude him making a fair point.

There are broadly two views about charity salaries in general, specifically in this case the salaries of chief executives of international aid charities. One body of opinion is that a huge turnover, national and international problems to address and thousands of staff combine to bring huge responsibility; highly skilled and experienced individuals are required to run such an organisation and ought to be paid commensurate with that responsibility.

Money for frontline activities

The other view is that for charities, which are dependent on public donation either through individual giving or via taxation or both, different rules ought to apply; donors would wish to see income targeted directly at the activities which fulfil the stated purpose of the charity to which they are giving their money, not used to pay six figure salaries for those at the top.

Of course comments generated throughout this debate were often more subtle, complex or differentially substantiated than above. I think however that the arguments are simple at base. Either as much money as possible should be used for the frontline activities of charities because that’s why they exist, or donations can legitimately be used to pay salaries that reflect qualification, skill and level of responsibility.

It would be difficult to argue the opposite; a minimal amount should go towards activities, and salaries should not correlate with responsibility. The use of funds for activities which efficiently achieve a charity’s aims and proportionate pay for people carrying out the roles which mediate this are however not mutually exclusive.

They are led into opposition by the comparison of incomes, the application of work culture stereotypes and the careless amalgamation of the concepts of being paid a salary versus earning one.

Large salaries for successful leadership

A six figure salary is a big salary. It is big relative to the income of the individuals the charity seeks to help. It is big relative to the income of other jobs in the UK. It is big relative to the salaries of frontline employees in the same charity. There are some who take the view that it is morally wrong that any organisation seeking, for example, to relieve poverty should make any of its employees wealthy in the process.

I think it is acceptable to pay large salaries for successful leadership in these charities. I think that chief executives should bear in mind the public perception of their salary, and increases in salary, and also should have a concern for their pay as a multiplier of the lowest paid of their staff. It would be foolish for any chief executive not to consider these because if the majority of the public were sufficiently offended so as to stop donating, the ability of the charity to achieve its desired outcomes would suffer.

Where chief executives of some, not all, of the large aid organisations have shown misjudgment I think is with respect to their pay increases during a time of austerity that has affected most of their donors.

There is a view that the culture of other work sectors would transfer well to the function of some charities. What a charity needs, it’s said, is someone with a background in the larger or more efficient public or private sectors to come in and sort it out, someone retired with time on their hands.

Rarely does one hear a call for a multinational company to hire a chief executive who has to do a lot with a little, motivate staff with concepts of fairness and societal improvement rather than purely pay, and with the skills to aim for a delicate break-even budget rather than go all out for profit, someone, in short, with a successful background in the voluntary sector.

It is not entirely clear why they should not wish to employ such a person. It is also not entirely clear why it is acceptable to pay a six figure salary for the ultimate purpose of making a profit but unacceptable to pay the same salary with the end goal of helping people.

Perhaps a fairer world would be one in which a care worker who excelled would be paid a big salary and a chief executive who failed would have to get by on the minimum wage. I know of no validated measure to calculate what a person should earn rather than what they should be paid. The truth is, I think, that some chief executives in large charities earn their salary, and some don’t.

It is as true of them as it is of any person, in any job, anywhere.

• Lesslie Young is chief executive of Epilepsy Scotland www.epilepsyscotland.org.uk

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