Charities must be more transparent about how they spend their money, Justine Greening, the International Development Secretary has said.
In an article for The Daily Telegraph website, published on 6 August, Greening said charities should "grasp the nettle on transparency and value for money."
Her comments were made in response to an investigation into 14 leading foreign aid charities, published by The Daily Telegraph on 6 August, which found that some of them paid their executives more than the Prime Minister’s pay of £142,500 a year.
William Shawcross, chair of the Charity Commission, said in response to the findings that high salaries for charity executives could risk "bringing organisations and the wider charitable world into disrepute". But his comments were criticised by Sir Stephen Bubb, chief executive of Acevo, who described them as a "damaging distraction".
Greening said the generous giving of the British people was why the UK has some of the best-known charities working to end global poverty. She said it was important for those charities to show their volunteers, subscribers and staff that they are good value for money. Charities, she argued, should follow the example set by the government and become more transparent about their spending.
"When I became development secretary I wanted to get our costs under control and I wanted my department to be more transparent about how it spends taxpayers’ money. DFID now publishes all spend over £500 and our development tracker website shows exactly where the money goes," said Greening.
"I have challenged our suppliers, including charities, to publish their own similar data on how they spend money on joint funded projects in a clear and accessible way."
Greening said it was important for "many of our best-known charities" to help the public understand their work. "I also believe that the more open organisations are the better the market will work to benchmark costs and improve value for money," she said.
"This article is a clarion call for charities to be more open about value for money. As government has, it is time for them to grasp the nettle on transparency and value for money."
Responding to Greening’s comments, Ben Jackson, chief executive of Bond – the membership organisation for international development organisations – said UK foreign aid organisations were committed to being transparent and accountable.
Jackson said: "Chief executives are often responsible for large global operations working in the most difficult areas and countries. This work can be challenging, complex, and because lives depend on it, organisations must ensure they have the leaders with the right skills and expertise."
He added that UK non-governmental organisations were committed to being transparent and accountable and had made significant progress in this area. "For example, 91 per cent of the worldwide total of international development organisations that published to the International Aid Transparency Initiative, detailing how and where aid is spent, are British. Bond is working hard with its members to ensure that every pound the public donates makes the maximum difference to the lives of the world’s poorest people."