Andy Ricketts: On senior pay, the sector should respond to its critics - no matter how unreasonable

Third Sector's latest study of the highest salaries at the top 150 charities by income shows a sector struggling to adjust to transparency, writes Andy Ricketts

Andy Ricketts
Andy Ricketts

There are some interesting similarities between the findings in Third Sector’s salary study from 2013 and the latest one, published yesterday.

Not much has changed, for example, among the top 10 highest-paying charities. Five of the highest payers remain the same, albeit with two of them having swapped places, and the top 10 overall includes seven of the same charities from the 2013 list.

Much of the response to information about executive pay from the sections of the media, the political world and the public has not changed a great deal over the past two years either.

Any story about charity pay tends to attract comments from people who say they choose not to support large charities, that these organisations should not be classed as charities and that charitable tax breaks should be abolished.

The responses to these points – for example, that the biggest charities are large, complex organisations that require specialist hands on the tiller to keep them from stormy waters – are well known to most in the voluntary sector, and haven’t changed much themselves since 2013.

The way that the sector deals with the public response – however unreasonable some of it might be – is important, and some charities have not helped by persisting in being as opaque as possible when it comes to revealing the details of their highest earners.

Four of the top 10 highest payers refused to confirm the names of the people who received their highest salaries, and many others do the bare minimum when it comes to their reporting requirements in this area.

The contrast between this approach and the recommendations made in April last year by the National Council for Voluntary Organisations' inquiry into senior pay is stark.

The inquiry, which was set up as a response to the criticism engendered by the salaries paid to the chief executives of the Disasters Emergency Committee group of charities, said that all charities with paid staff should consider publishing the salaries of their highest-paid employees, and those with incomes above £500,000 a year should always adopt this policy.

It said that, as well as publishing the name of the highest-paid employee and their job title, each charity should publish a statement from its trustees that justified pay levels and explained how they help to deliver the charity’s objectives. All this information should be available within two clicks of a charity’s home page, it said, referred to at the time by the man who led the inquiry, Martyn Lewis, chair of the NCVO, as "two clicks to clarity".

The recommendations were sensible and proportionate, would be cheap and easy for the overwhelming majority of charities to implement and would go some way to making the sector more transparent to the giving public.

Third Sector’s research would indicate that few charities have taken these recommendations on board so far. Save the Children, which has a link on its home page to details about executive pay and the justification for it, is one notable exception.

Some people will not be happy until all charity employees volunteer all their time for free, but others would warm to a more open approach. It is to be hoped that the picture has changed significantly by the time Third Sector carries out its next salary survey.

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