New Year, new announcement from the Charity Commission about how they will be doing research into Charity pay. “We understand why the public care about how charities pay their staff. That's why we're using the data we hold to make a study of pay in charities. We will publish our findings this year.” So where to start on this? Of course, let’s not let the facts get in the way of a good headline. The only data that the Commission holds is charities accounts. In these accounts, staff pay only relates to people earning in excess of £60,000 and is reported as the number of people within pay bands. Now of course for most charities (about 90%), they won’t report on this as they don’t have anybody earning at this level. So it will depend on how the Commission’s report is couched; for example will it be ‘200 people earned more than £100,000’, or ‘15% of charities reporting this data had somebody earning more than….’?
What was more disturbing was the comments on twitter such as “the CEO & exec salaries are sickening - no one deserves that amount of money” Now I am a chief officer of a small charity and I have to tell you that I don’t take home anything like the UK average salary which is now £29,009. I suspect that what people were talking about is large charities in the top 3%. But of course how true is that statement even then? For interest, I interrogated OXFAM’s accounts. Their CEO earned £130,308 in 2018, which seems a lot of money but let’s also note that the organisation has 5,097 staff and £120.9 million income. So is that a lot of money? For comparison, the CEO of Leeds City Council earns £180,000 and the organisation employs 12,616 staff and income of £1.3 billion. So the Leeds CEO gets about £50,000 more for managing twice the number of staff and a significantly larger budget. But of course the OXFAM CEO is managing an international organisation, so I am not sure you can say it’s sickeningly larger?
Of course this moves us to the usual thinking that we are told by certain press publications that charities don’t need staff, it’s all run by volunteers. And in many very small local organisations that is the case, and you don’t need an office to work from. You could operate from somebody’s front room, and yes for a very small organisation you can. But then charities are also told that we duplicate things and big is beautiful, so whilst it’s easy to manage a couple of volunteers with no paid staff, it gets much harder to do that in a safe and supportive way when you have 20, 30, or even a few hundred?
The usual mantra of the Commission is that charities should be more transparent. This is good but looking at the comments on twitter there was a lot from a not for profit CIC that has a single director and is only required to publish commercial accounts, which tell you very little in terms of how their money was spent, or even what the staff were paid. Also, sports organisations registered as CASCs gain most of the financial benefits of charities yet there is no requirement to publish any information on their finances.
Perhaps what is needed is more financial transparency for all not for profits, not just registered charities. Also, should pay rates be set by the court of public opinion? And if so, why should this only apply to charities considering that it’s reported that Top FTSE bosses are paid a typical worker's annual salary in just 33 hours?