Charity executive pay - what is the right level?

22 September 2015

It is rare to see the words "charity" and "executive" in the same sentence, unless it is part of a headline accusing charities of paying too much. However, charities employ around 1 million people in England and Wales so there have to be senior managers and chief executives to lead and organise the effort. And while it may be possible to volunteer to serve without being paid, on the whole, the workers expect to be paid for their time. Pay policy is a key part of setting the right culture within an organisation but it is often left unspoken. Human Resources departments will provide help on pay levels when trying to retain staff or for recruitment and an understanding of the market levels of pay in comparable bodies is helpful. However, it is the response of the charity to the market that defines a policy that helps to set the culture.

Then when questions come, from staff or perhaps the Daily Mail, the response can be made with confidence because the policy has already been discussed.

The policy may acknowledge that the market sets pay rates and potential staff are generally aware of what is being paid at competitors. There are many compromises used by organisations to save costs and there are particularly poor practices amongst the lowest paid in care and welfare. So it may be best to start from the bottom and work up.

Initiatives such as the living wage should help provide better pay for some even if there may be less jobs as a result but charities can ensure that, for example, staff providing care are paid for reasonable travel time between clients. Anything that rebalances the lot of low paid workers should help retention and recruitment but also be an explicit part of pay policy and culture.

At the upper end of pay, scrutiny is increasing not least because new accounting disclosures are included in the new charity SORPs. The NCVO task force recommended further transparency so charities will have to make sure that their figures are backed up by a coherent policy that is part of the culture it is trying to nurture. Publishing pay benchmarks and explicit statements from the policy may help. Scrutiny on pay is no longer limited to the private sector and charities will need to learn how to cope with the glare of public attention.