EDITORIAL: Fair pay for CEOs should not be an issue of concern

Lucy Maggs

Charity chief executives run complex organisations. They have to balance the financial health of a charity with the demands of stakeholders, including beneficiaries, trustees and donors, and juggle the often conflicting roles of campaigning and service delivery. In the case of the largest charities they also have a turnover of millions of pounds.

The job is more complicated than that of any CEO of a blue chip company, yet they are still only paid a fraction of the salary. Commercial sector chief executives earn an average of 23 per cent more than those in the voluntary sector (Third Sector, 24 September). The pay gap is closing, but there is still a long way to go. If the sector wants to attract people capable of running such complex organisations it needs to pay accordingly.

There is, however, still a public perception that charity chief executives should be motivated by their cause and prepared to be paid little, or nothing at all (They Said It, p2). And charities are worried that if they offer what may be seen as large salaries, donors will be turned off giving.

At the same time, though, the public is more demanding about the standards it expects from charities. Donors want to know where money is being spent, exactly how much is going on fundraising and administration and how much is going to the beneficiaries. For a charity to be this efficient and accountable, it needs professional, well-trained staff. No matter how strong a chief executive's commitment to a cause, it won't pay for the years of training and experience they have put in to be able to do their job effectively.

Charities are starting to realise the importance of investing in staff - more have training schemes, dedicated human resources departments and better salaries. But the public also needs to be educated as to what it takes to run the kind of thriving, professional organisations they want to give their money to.

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