Two years ago, in a letter to Third Sector, I defended some of the salaries paid to charity staff. It was a response to the biannual survey in the magazine of senior executive pay. The latest version of the survey, listing the 100 highest-paid senior executives, was published in March and has prompted me to change my view to some extent. Here’s why.
Part of my rationale two years ago was that many employees have very complex jobs and significant responsibilities, and, through their skills and experience, are offering their charities a good return on investment. I was also, and still am, concerned that if we take a sackcloth-and-ashes approach to remunerating senior charity staff, we will end up with a sector led by those with private wealth or high-earning spouses.
In many respects, my opinion hasn’t changed. We live in a world where the brightest, most effective people can earn a fortune in the commercial sector. Even the public sector has a large number of well-paid jobs. If offering a reasonable salary incentivises people to work in our sector and those people raise more money, run their organisations more efficiently and ultimately make the biggest difference to causes and beneficiaries, it would be self-defeating not to pay such salaries.
But, and it is a big but, we have to accept that the voluntary sector is different. We have to remember that we are spending donors’ money and if they don’t like what we are doing they will not give. But what worries me more is the culture that seems to be developing as a result of what a colleague described to me as "aggressive commercialism", reflected in some salaries that are out of kilter with the culture of the voluntary sector.
Of course we all want to be operating professionally, to the highest standards, and to be giving real value for money to our organisations. But there is a difference between this and wanting to be the biggest (just look at a few charity vision statements), striving to raise the most money or be the most innovative, or using language such as "attacking" competitors.
Some of the salaries in the recent Third Sector survey were eye-watering. In the public sector the Prime Minister’s salary of £142,500 is often used as a benchmark, with salaries above that level requiring specific approval, and there are some salaries above that level in the survey that can be justified as reflecting the complexities of a large, multi-faceted and sometimes international charity. But some just do not, and are in danger of damaging the image and reputation of the sector as a whole.
Some people argue that we have to compete with higher-paying sectors for our staff. Why, they ask, is it acceptable for an investment manager in a company to get a bonus if their investments have exceeded targets, but giving bonuses to an in-house team at the Church of England makes for a critical news story, even though they were responsible for doubling their investment return in 2015?
Similarly, how come an eminent research scientist can be paid top whack in a pharmaceutical company or do pretty well in a public sector or education establishment but, if that scientist is doing the same work in the laboratory of a research charity, they are subject to scrutiny when the annual report is published?
The answer is that we have to recognise our sector is different and the motivations for working for a charity cannot be based solely on remuneration. Yes, we have to be honest with our donors about the costs involved in running a charity, and we need to make sure we employ the right people to ensure we have well-governed and well-managed charities. But we also need to protect our unique culture in order to inspire trust and confidence, both with donors and beneficiaries. I know of one senior charity employee who turned down a pay rise because they felt they were earning enough already.
To sum up, I am perfectly happy for people to make a proper living from working for a charity. But, in some cases, people are doing more than that: taking so much out of their charity that they are, in effect, making money out of it. That is wrong and, where it is happening, those in charge of the charity should think again and find a better balance.
Valerie Morton is a fundraiser and consultant