Just as we are coming out of the coronavirus crisis and we thought life for charities might become a bit easier, the report on Chief Executives’ salaries hit the headlines.
This is not a new subject. I wrote a letter to Third Sector in April 2015, criticising excessive pay packets for charity Chief Executives and other staff. At that time the highest paid charity CEO in the UK was receiving less than £950,000 – which seems small beer in comparison with today’s top earner of £4.6 million, but was nevertheless as inappropriately high then as it is today.
Even smaller earners in the sector are over the top morally: how can one justify a charity paying its Chief Executive almost 27% of its total income, as reported in the Daily Telegraph recently. Where is the public benefit in that?
My letter in 2015 drew fierce response, both in favour and against my views. The old war-horse which is invariably trotted out is that charities need to pay salaries comparable to the private and public sectors in order to recruit the best talent.
That argument doesn’t hold water, because not everyone’s primary motivation is money. I, like many colleagues and others in the Third Sector, happily work for much less that we could achieve in the private or public sectors because we enjoy the work we do; feel we are contributing to making our country and the Commonwealth better places to live in; and rate our rewards in terms of what we can do for others less fortunate than ourselves, rather than in the size of our remuneration.
Charities should look hard at what they pay their senior staff in the light of the Charity Commission’s guidance on public benefit. If they are not prepared to regulate themselves in this, sooner or later a government will be elected which will impose regulation on them.