Expert view: The hot potato of charity salaries

Pay increases need to be handled carefully, because donors and the public are sensitive.

There has been much publicity recently about the latest Acevo survey on the pay of chief executives in the sector, which showed barriers being broken and ceilings smashed, but little response from chief executives themselves.

It wouldn't be surprising if those struggling to run charities supporting unglamorous causes or working for small bodies with tiny incomes gave a wry smile at the thought of earning such large salaries.

But in this day and age, when public scrutiny is becoming ever sharper and precise accounting details simpler to obtain, many trustee boards must be feeling they need to consider salary levels in their own organisations, not only when they are appointing new chief executives, but also with regard to staff salaries.

Remuneration

The former is somewhat easier because the remuneration package will usually be agreed by the board before the process is started. Where it becomes more difficult is with current salary levels in the organisation: if they don't go up, will the chief executive seek alternative employment? And how much should his or her salary be to avoid this upheaval?

Upward movement for the chief executive will also affect other salaries, and many charities, particularly the smaller ones, will simply not have the budgets to increase salaries across the organisation.

Trustee boards must also consider how any major uplift will be perceived by donors. The vast majority of the public still seem to believe that people working in charities do so for modest salaries - or, indeed, no salary at all. It is therefore essential to be sensitive about how such re-arrangements are publicised and to consider how they will affect a charity's standing.

Expenses only

What is certain is that every board must tackle this problem and, in the end, the responsibility rests with it. At a recent Charity Commission focus group, called to discuss trustee remuneration - another hot potato for many charitable organisations - it became clear that practices differed widely. Some larger organisations had grasped this challenge and achieved agreement with the commission, but the majority of attending organisations seemed to think it was unnecessary to pay anything other than direct out-of-pocket expenses to their trustees.

Again, the question of public perception was discussed, but perhaps the idea of paying trustees becomes less difficult to fathom when one equates it with their widening responsibilities, the very same considerations to take into account with the chief executive's salary.

  • Judith Rich is the chair of Charity Appointments and the Diabetes Foundation, and a trustee of Relate and Reach 

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