The Charity Pay Debate: Competition Vs Transformation Author: Guest     
Date: 20th November 2015

This post was written by Catherine Negus, Charityworks Graduate 2012-13, and was originally published in February 2013.


The recent acrimony over charity chief executive salaries has once again thrown up questions around the very nature of the sector. In the rush to defend the many excellent organisations under fire, we need to be more radical in setting the terms of the debate, but also scrutinise our practices more intensely. This article discusses the charity pay debate and asks if we want a competitive or a transformative sector?

Critics of high pay in charities have on the whole argued that the sector is essentially different from the private. Some stated that if charity executives feel they deserve high salaries, they should abandon their feel-good ‘lifestyle choice’ and move into business, where they will earn more through facing fiercer competition and being forced into more stringent efficiency. Working in charity, it is often insinuated, is not very difficult – organisations could simply employ businessmen at the end of their careers, ready to take a pay cut for the satisfaction of helping people and a friendlier workload.

Other critics focus on the slightly strange idea that wanting a larger salary somehow sullies charity workers’ ideals and makes them unworthy to serve the cause. This might make sense coming from people opposed to high pay in any sector, or pay inequality, but in many cases it calls to mind Dan Pallotta’s observation that “We have a visceral reaction to the idea that anyone would make very much money helping other people. Interesting that we don’t have a visceral reaction to the notion that people would make a lot of money NOT helping other people.” Many justify lower salaries in the charity sector on the grounds that the satisfaction of helping others must be rewarding in itself. (This does rather beg the question of why corporate fat cats, whom the Government claims to be so crucial to the economy that they must not be scared off abroad, cannot likewise bask in the warm glow of contributing to the nation’s wellbeing and hand over their unnecessary bonuses to the poor.)

Charities have often responded to accusations of excessive pay by arguing that they are both very like businesses in terms of the management and efficiency required, and operating in a market-dominated society. The most common defences for high pay have been that in order to attract talent, including from those with private sector experience, the charity sector must pay competitively and at ‘market rates’. It is also described as only fair compensation for the demands of this work. As Oxfam put it, “We believe this is fair reward for a job that involves long hours, large amounts of time away from family and overseeing a £360 million organisation that runs everything from a 700-branch national shop network to major emergency responses and long term development work to improve the lives of the poorest people on the planet. Our chief executive is also responsible for more than 5,000 staff and tens of thousands of volunteers. We pay our chief executive less than other charities of similar size and scope – and considerably less than someone could expect to earn running an organisation of this size and complexity in the private sector.”

Is this the right approach? Certainly the vitriol directed from some quarters has been striking and it is important that the best charities defend themselves from charges of inefficiency and even self interest, particularly where the charges are patently untrue. Yet charities should also try to change the paradigms of the debate and reverse some of the twisted logic. Why not argue that a generous salary is not only proportionate for the managers of these complex organisations, but also appropriate given the massive social good they bring compared to many on similar salaries (and much higher) in the private sector? Spokespeople for several of the aid agencies targeted in the Telegraph hurriedly defended their bosses’ salaries as in line with those at other charities.  In the online debate; however, it was clear that many people do feel charity work is more deserving of recognition and promotion than that of much traditionally high-paying work. It would be good to build on this, drawing on ideas such as those of the New Economics Foundation, which proposes measures to restructure society to value ‘what really matters’.

At the same time, the charity sector should take a good look at itself and consider how it can use pay scales and career progression to create a better society in other ways, without simply becoming a mirror of the private sector.

We should be building a sector which does not demand ridiculous working hours, compensated through high pay, for career success. We need a more balanced society where people have time for family, volunteering, the arts and their own health.

We should not unquestioningly subscribe to the idea that only high pay buys quality work, thus reinforcing the capitalist idea of human beings as purely ‘rational’ creatures in the economic sense. The sector is struggling to absorb large numbers of talented young people clamouring for entry-level jobs. They want to enter the sector not because they expect a high salary but because they feel it is the right thing to do and cannot see the point in getting out of bed simply to create profit. Perhaps the scenario is different at the top, but if so, we need to develop our own talent. It should not be necessary to entice workers from the private sector to come and lead charities.

Perhaps most importantly, we need to ensure that the salaries of the top managers are in proportion to those right at the bottom, who are often giving just as much of themselves to the cause. Even with the greatest respect for some of the aid organisations targeted in the Telegraph and other big players, it is hard to see how they can justify the salaries of their chief executives when many claim not to be able to afford even the minimum wage for their interns, and when charities are amongst the biggest users of zero-hour contracts.

Much will be lost if the charity sector tries to model itself on the private. Much will be gained if it defends its value in its own terms, while also working from within to create a fairer and more balanced society.




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