The Truth About Charity Bosses’ Pay

It has been depressing this week to see a row being fomented in the press and media about how much chief executives of local charities get paid.

Critics of the sector have been having a field day, and in the process displaying a more or less total ignorance of how modern day charities work, and what they are there to achieve.

So let’s put all the outrage and hysteria to one side for a moment and have a cold, hard look at the facts.

First of all let’s examine what is a charity.

For many of us a charity conjures images of someone waving a plastic bucket in front of us in the street and we think of people doing things for others for nothing. And when we give to charities we expect every single penny to go to the cause we are supporting.

The reality of course is that although many charities do rely on fund-raising, many others do not: they receive government funding for their work, or else are paid to provide products or services like private sector businesses.

Queens University is a charity, so are many nursing homes and mental health organisations whose highly trained professional staff provide counselling, care and therapy. Within the sector there are theatres and arts groups and organisations that provide all manner of training.

The difference between a charity and a business is primarily twofold. A charity does not make profits that are then distributed to shareholders, any surpluses made go back into the organisation. And a charity by law has to be operating for the public benefit and have a specific purpose such as promoting education, health, the arts etc.  Charities are exempt from some taxes and are also regulated by the Charity Commission.

So in crude terms the main differences between a charity and a business is that whilst a charity by definition has to do things that are good, businesses can do whatever they like, good, indifferent or down-right bad.

And whilst we feel it is perfectly legitimate for people to get paid big bucks for doing bad things, it is somehow utterly unacceptable for us to pay decent wages to people who do good things. When you stop and think about that for a moment it makes you wonder what on earth the world is coming to.

Much of this nonsensical view of the so-called Third Sector stems from a different age: a time when very wealthy philanthropists many of whom had made money out of “bad stuff” decided to put something back by giving money to the poor and needy or else so there is this sense out there that people who work for charities should all be volunteers who do it for the cause and don’t get paid.

Of course many thousands out there do just that and make an enormous contribution to good causes.

But many charitable organisations these days have massive turnovers, and if you want to make a difference, a real difference you simply have to pay for staff, and funnily enough that includes management as well.

Is anyone out there seriously arguing that Queens University lecturers should work for free? Or that clergy should live on fresh air? Or professional therapists refuse to be paid – just because all of them do work that counts as being “good.”, and that the rest of us should be entitled to sneer at them because we don’t?

And for those kind enough to allow them to be paid at all, what is the rationale for arguing that they should be paid less because they have jobs that are helping to make the world a better place? Strip away all the phoney bluster and indignation and you see the whole argument for what it is: utterly illogical and ridiculous.

So let’s just put another myth to bed. Chief executives of charities are not the real bosses. They have a fancy title and they run the staff and operations, but they are not in charge. They are employees, hired hands. The people who run the show are the board of trustees. They hire and fire the chief executive and fix his or her salary. And guess what? They don’t get paid at all, they are volunteers with no vested interest in whatever the chief executive gets paid other than ensuring that they have the best person for the job and that the package is fair and reasonable given all circumstances. Those circumstances will vary according to the position and the skills required. From time to time excessive packages will be paid, but these are not the norm at all.

So whilst there is absolutely no room whatsoever for fat cats in the charitable sector, all staff need to be paid a fair and reasonable wage and that applies to managers too. It is vital that charities can attract great people who have the integrity, courage and expertise to make them better, otherwise you will end up with all the good people getting paid big money for doing bad things, that’s just how the world works.

But there’s a serious lesson here for charities too. Each and every one of them is on notice now. They need to demonstrate day and daily how and why they make a difference, and what value they bring to society and the common good.

And for chief executives this should be a wake-up call as well. It’s not good enough for them to hide behind their desks, or spend all their time chasing funding pots as if their charity were some kind of giant job creation scheme. Ultimately it is all about the cause they represent. If more were to get out there and push harder for change, and help to make a tangible difference, maybe, just maybe there would be less fuss about their pay

2 Replies to “The Truth About Charity Bosses’ Pay”

  1. Every charity needs to be careful with donated funds be they public or private contributions, as you point out that is what trustees are there for. There are literally thousands of volunteers out there every week giving of their time for good causes. A very balanced and informative piece. The last few years have been very difficult for fundraisers, the bucket collection can be an important source for small charities as larger corporate donations dwindle.

  2. I agree with all you say but we have to be sure that the board members are not too close to the CX who actually “founded” the charity and the charity also employs the wife of the CX in a senior post. All terms and conditions need to be looked at especially the pension scheme.

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