Charity staff received an average 3 per cent rise in 2002-2003, an increase of 0.5 percentage points on the previous year. This closely shadows median pay settlements of between 2.9 per cent and 3 per cent for the whole economy.
"This is in sharp contrast to last year, when voluntary sector settlements lagged behind the rest of the economy," the report notes.
Of the 26 charities and 37 housing associations included in the survey, Oxfam emerges as the most generous, with a 6.7 per cent rise, while the British Red Cross and Guide Dogs bring up the rear.
IRS Pay and Benefit Bulletin editor David Carr said that the voluntary sector had been catching up over the past 12 months while the private sector experienced a pay squeeze. "There has been a realisation by the voluntary sector that they have to make larger increases in order to solve their recruitment problems," he said.
He added charities were also becoming more sophisticated in their pay policies, responding to market factors such as local labour market rates.
For example, the Scout Association increased its London weighting allowance by 10 per cent in January.
But he went on: "While pay increases have caught up with the private sector, it must be remembered that, overall, voluntary sector staff generally earn less. This pay differential widens with seniority and may be an area that trustees will visit in the future."
Oxfam's pay award, made in September last year, consisted of a 1 per cent across-the-board increase and merit rises worth 5.7 per cent of the total pay bill. This follows a 5.2 per cent average increase the previous year. But the charity remains 7 per cent behind median pay for the NGO sector in the UK.
At the bottom of the pay range were the British Red Cross ,which offered a 1 per cent basic rise with a 1 per cent merit increase, and Guide Dogs, which gave all its staff a 2 per cent rise. Greenpeace agreed a £500 flat-rate increase for all workers.
Performance-related pay continues to make gradual inroads into the sector, with 11 surveyed organisations making some kind of merit award.