The Intelligent giving blog

Do charity bosses get paid too much?

Adam Rothwell - Friday, August 8, 2008

Some coins

This is one of the commonest questions in the charity world. And I don't know the answer.

Although it’s easy to mock charities like the Royal Opera House, which last year paid its top-earner over £500k, there is another side to the story: charities need to attract talent. That needs to be paid for. And however altruistic charity workers are, they’re not saints.

Yet at the same time, the fact that the CEO of Cancer Research UK earns over £200k a year rankles with me. Yes, I know he’s an extremely qualified man with the potential to earn many times that in the private sector. And I know that he manages a charity which spent over half a billion pounds last year. And I know that it’s better to have a well-run charity with a highly paid Chief Executive than a poorly run one with a pauper in charge.

But I still don't like it. £200,000 is simply a lot of money, and the fact that CR-UK’s boss takes home that amount makes me wonder why he thinks he needs it. Because, of course, he doesn’t ‘need’ anything like that amount. Why doesn’t he give some of his salary up, and spent the money on medical research?

On the other hand, however, I can hear CR-UK’s defenders decrying that argument as nonsense. Surely, they’d counter, I wouldn’t put a cap on charity bosses’ earnings? And who would decide when a salary was ‘too much’?

These are good questions. I don't think charity wages could, or even should, be regulated. Likewise, I have no idea when a wage would count as ‘too much’.
So should I just stop worrying and assess what good work the charity does, and judge it by that criterion alone? Do I even have a right to be morally outraged at such large pay-packets? Even I get paid more than the vast majority of people in the world, after all.

I’m in a moral quandary. Can anyone help me get out of it?


 

 


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Submitted by Anonasalways (not verified) on Sat, 16/08/2008 - 11:52pm.

theres a lot of talk about how well we are paid, i think i must be working for the wrong charity...........


Submitted by Martin Davies (not verified) on Wed, 13/08/2008 - 12:03pm.

Conor, I won't defend being well paid. I'm not well paid by any means - for a full working week I would be OK, but being limited to part time I'm well below minimum wage per week......
But I enjoy the work I do.
Sometimes people get paid in currency other than money. Its non-taxable and can last a lifetime.

The public seem to think that charities should run for free. Never figured out myself how to get BT, Eon, Staples, Asda and PC World to provide goods and services for free - so in the meantime we do have bills to pay to keep the charity running. Regardless of staff costs - part of which tends to go to HM Treasury!


Submitted by Ginsters Dragon on Tue, 12/08/2008 - 1:11pm.

 These arguments are so old hat that I wasn't going to bother commenting, but I will now if only to say 'spot on Conor'.

 

Don't shoot the messenger


Submitted by Conor Byrne (not verified) on Tue, 12/08/2008 - 12:06pm.

This is a real dilema that charities face and should be prepared to face...but at every turn they need to defend paying their people and paying them well.

Everyone who comments on this post I imagine will defend being paid well and I suspect that is because they all work in the sector, and they should defend being paid well.

The unfortunate reality however is that the public do not like the idea of people working in the sector being paid...let alone being paid well.

It is our job to make a good case for the salaries we are paid. I know of a CEO who is a wealthy man and offered to take the job as CEO for no salary and the board of the charity refused his offer. Rightly so. By paying this man a salary, and a good one, he is duty bound to do a good job and is also answerable to a board. Had they accepted his offer and not paid them they ran the risk of him not working as hard for the organisation as he should.

This is a subject that wont go away and isnt one we should sweep under the carpet, so well done for bringing it up. Maybe we should have a discussion or see a future post on how we can rightly justify paying good people well?


Submitted by mikemuses on Sun, 10/08/2008 - 8:53pm.

You see we can only know how much charity bosses are paid - not how much they give back to their own charity.  But would we want to? By taking the salary cut from other sectors to the charity world they may already have made their sacrifice. Perhaps we should consider that the charity has in fact matched their previous wage, and they've donated the difference.  In which case, they be amongst the most proportionally generous in the country.


Submitted by Charity Chris on Sat, 09/08/2008 - 1:16pm.

"Why doesn’t he give some of his salary up, and spent the money on medical research?"

Perhaps he already has. You also comment:  "Yes, I know he’s an extremely qualified man with the potential to earn many times that in the private sector."

Isn't he effectively sacrificing that private sector salary to do work for medical research by working for CRUK?


Submitted by Martin Davies (not verified) on Fri, 08/08/2008 - 8:04pm.

Sure, they could advertise the post at minimum wage. Thats the lower end of the scale.
Or for those charities that are also companies, make the boss a director - minimum wage rules wouldn't apply then!

Rather limiting the number of applicants only to those who have enough other income to afford to take it on.

Or maybe they aren't paid enough? What is actually used to decide salaries?
I've met several people on above £10k a week income. The right skills, the right value to the organisation, and they become worth that much. Two ex-shipyard workers, an ex-dry cleaner, an ex-cleaner - the usual sort of talent that works for their money.
I daresay they'll all be on £20k a week within the next few years. But for them its market forces determining income - increase company turnover by a million or two, expect increased income.
So what does any charity (including IG) use to work out how much a particular job should be paid? And should any pay be affected by results, either in income or in meeting different charity objectives?

Martin


Submitted by Matthew Slater (not verified) on Fri, 08/08/2008 - 6:23pm.

I don't there's a moral dilemma unless there's a potential action to come out of it. Those wages are between the charities who need the best value out of their managers, and the executives selling their talent.

The charities are doing the best they can with their money in the marketplace, so can't be criticised.

The executives can be criticised but only for not being generous enough. Now which among us will cast the first stone?


Submitted by rspcacambridge on Fri, 08/08/2008 - 1:07pm.
  1. You might find that dropping the wages of charity executives ultimately caused the government to regulate them upwards again. There's some evidence that women are more likely than men to make career decisions for reasons other than salary levels. If lower wages meant a higher than normal proportion of female chief executives and income disparity was still seen as a measure of unequal treatment for women there might be all kinds of unintended consequences.
  2. I'd be a bit worried that salaries which were significantly lower than "normal" for the level of responsibility, technical knowledge etc. might mean that charities became more likely to attract "zealots". 
  3. There's a lot of variation between charities, and it might be interesting to study what causes it and how it impacts on their activities.

Submitted by Adam Rothwell on Fri, 08/08/2008 - 12:23pm.

Well, our charity profiles are indeed objective, Anon2, but this Blog has never pretended to be a repository of uncontroversial fact! And as for eliciting sound and fury - well, I just wanted to hear if anyone had any more coherent views than I have...

Adam, Intelligent Giving


Submitted by Anonymous2 (not verified) on Fri, 08/08/2008 - 11:32am.

Isn't this site supposed to evaluate according to objective criteria? 'I don't like it' and 'It rankles with me' are barely even value judgements; they seem more like knee jerk responses, though perhaps aimed to elicit more sound & fury from readers and draw atttention to the website. Ho Hum.


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