Charity Commission won't compel charities to reveal chief executive salaries

But it will ask them to put details of where any overseas funding comes from in their annual returns, according to a document published this week

Consultation looked at content of annual returns
Consultation looked at content of annual returns

The Charity Commission has backed away from proposals that would compel charities to reveal the salary details of their chief executives, but will press ahead with plans to ask charities to disclose their sources of overseas funding.

The regulator yesterday published a final report about its consultation on changes to the 2018 version of the annual return, which shows a number of amendments to the proposals put out for consultation by the commission in September.

The commission said that each charity would need to include in their annual returns information on their highest earner’s total pay package, rather than the original proposal to disclose the salary specifically of the chief executive, who might not be the highest earner.

But the commission said that the data on high earners, which would include total benefits such as bonuses, private healthcare and other benefits in kind, would be kept private and held only for regulatory purposes.

Charities would also be required to state in their annual returns details of how many employees earn more than £60,000 a year, in bands of £10,000, and in bands of £50,000 for those paid more than £150,000 a year.

They are already required to report in their annual accounts the number of employees who are paid more than £60,000, in bands of £10,000.

Information on any payments to trustees, including for providing professional advice to the charity or if they receive other benefits, such as renting property from the charity below market value, would need to be included in the 2018 annual return and would be made public, the regulator said.

Despite some opposition from the sector, the commission said that income from outside the UK would also need to be put in the annual return, including information about which organisations, individuals and countries the funding came from. Sector umbrella bodies had objected to the likely cost and difficulty of collecting this information.

The commission has also rejected concerns that asking for this information – which will include funding from the European Union – could suppress "the space in which civil society operates" or be "used as a means of political control or restriction in the manner suggested by some respondents".

But the commission has altered the question to include the total value of payments from donors outside the UK only if the payments are worth more than £25,000, or in the case of a charity with income of less than £25,000 a year, if the income is 80 per cent or more of the charity’s gross annual income.

Providing information on overseas donors that are private institutions or individuals would be voluntary in the 2018 annual return, but mandatory from 2019 onwards, the regulator said.

Charities will also be asked to disclose how they transfer money outside England and Wales, such as by cash courier or through other charities, and will have to state whether monitoring controls for overseas expenditure are in place.

Disclosure of this information would be voluntary for the 2018 annual return and compulsory from 2019 onwards, the commission said, and the information would not be made public.

A question on Gift Aid would be removed, the commission said, because it replicated information charities already provide to HM Revenue & Customs, and another question on whether charities get rate relief on their premises would not be included.

Information on safeguarding and Disclosure and Barring Service checks would be required in the annual return, but would not be made public, the commission said.

David Holdsworth, deputy chief executive and registrar at the Charity Commission, said: "In some important areas, including around executive pay, we will require charities to provide us with more detailed information.

"We know the public care deeply about transparency in this area, and it is vital that charities, and the commission as regulator, respond constructively to these expectations. I am confident our decision in this area strikes the right balance between transparency and protecting the personal data of individual staff members in charities."

Michael Wright, director of membership and communications at the international development umbrella body Bond, said some of the revisions to the annual return "do not go far enough" and would "still prove unnecessarily burdensome".

The new annual return would apply to charities with financial years ending from 1 January 2018, and a digital service to help complete the 2018 annual return was expected to be available within the next four months, the commission said.

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