BU over charity director salaries

[Happydoingitjusttheonce]

Is the criticism shortsighted? CEO of NSPCC criticised for earning £167k. At its peak a few years ago the charity was turning over £150m. Anyone with the skill and experience to manage that level of income could be remunerated in the private extremely handsomely and much more so than Peter Wanless is. Do people really think the charity could get someone in for buttons, or for nothing, to do that job?

£167k is a huge salary, if the ceo is on that kind of money, he can afford to give to charity more than I can.

They are not charity organizations, but in my country elderly care homes are not allowed to make a profit. This was done so that the homes would be forced to spend more money on care rather than on CEO's.

You're confused. The care homes are non-profits with a social mission which is what a charity is and non-profits can pay the CEO what they like because CEO salary is an expense which is deducted before profit. What you mean is that the care homes couldn't make distributions to shareholders and are using a third party provider as a route around this- however, the winners are shareholders, not employees

Let's try that again

They are not charity organizations, but in my country elderly care homes are not allowed to make a profit. This was done so that the homes would be forced to spend more money on care rather than on CEO's.

You're confused. The care homes are non-profits with a social mission which is what a charity is and non-profits can pay the CEO what they like because CEO salary is an expense which is deducted before profit. What you mean is that the care homes couldn't make distributions to shareholders and are using a third party provider as a route around this- however, the winners are shareholders, not employees

Yy re wagonloads of tat. There's absolutely a place for donating items, I've done it myself, but far too many people just use it as an excuse to get rid of their shit cheaply and guilt free.

Someone who earned 167k in the private sector would not have the skill set and connections/influence to run, for example, Save the Children. They would be taking a massive haircut to do that role. If I remember rightly, the current CEO of Save the Children was previously the PM of Denmark.

@Johnnycomelately1

Ugh, did you bother reading my post fully, because I don't think you did.

In my country these homes are not allowed to make a profit to cap CEO salaries. CEO's of said homes have found a loophole to pad their salaries by hiring 3rd parties to do the work.

Nothing to be confused about. It's sleazy as hell and very deliberate.

far too many people just use it as an excuse to get rid of their shit cheaply and guilt free

So, so true. I'm a volunteer at a charity shop and the amount of total shite we get is astonishing. One of yesterday's highlights was a threadbare cream coloured toilet pedestal with brown stains all over it. Chipped mugs, broken toys, half used bottles of shampoo, empty DVD boxes...... mountains of total crap which we have to pay for the disposal of.

Am late to this, but wanted to say that whilst we undoubtedly need skilled people to run big charities, I question exactly what skills and attitude someone brings to the role when they have previously been extremely well paid and yet still can't bring themselves to take a pay cut for a few years.

Charities have been increasingly hassling and guilt-tripping their supporters for more money which has put people off donating. Investing in dubious unethical funds, off shore banking etc. Is this what a banking/ big business mentality/ skillset brings to the sector? No thanks.

Also it galls me that poor people give a much higher percentage of their income to charity - we give £15 a month to charities which is 10% of our disposable income after essentials so a lot of money for us but we give because we know other people struggle and we have used charity services ourselves. If the CEOs gave 10% after essentials that would be how much? Taking home maybe £8000 a month, allowing a generous 4000 for a large mortgage and private school fees and essentials, they could surely be giving at least £400 a month and still have more left over than most people earn in a month. But do they? I doubt it. Have some proportion and humility and take a pay cut.

Internet ok, apologies if I ,misunderstood you. Maybe you can help me understand it. My logic:

Profit = Income less expenses
CEO's salary is an expense
Level of CEOs salary or capping it therefore does not prevent the care home from making a profit- in fact quite the opposite. A higher CEO salary would reduce profit.

Or are you saying that they can only charge the residents cost plus a certain margin to cover overheads which automatically limits the CEO's salary just because there's only x amount left over?

Can you link to a news report about it? That might help.

LunasSpectre I have heard the same from friends collecting for an aid convoy. Hairbrushes full of hair, half-packets of biscuits... urgh.

If I'm donating anything to a charity shop, we check it, make sure it's clean and working. DS will do puzzles, set up board games, etc, before breaking them down again to make sure all the bits are there. We then put a post-it note on the box saying it's been checked, the instruction leaflet is included, etc etc.

Anything not fit for the charity shop is either recycled, tatty clothes go into the "clean rags" bag for the Red Cross, and things which are good to use but not fit to sell are put on Freecycle. Any unrecyclable dregs are binned.

Also it galls me that poor people give a much higher percentage of their income to charity - we give £15 a month to charities which is 10% of our disposable income after essentials so a lot of money for us but we give because we know other people struggle and we have used charity services ourselves. If the CEOs gave 10% after essentials that would be how much? Taking home maybe £8000 a month, allowing a generous 4000 for a large mortgage and private school fees and essentials, they could surely be giving at least £400 a month and still have more left over than most people earn in a month. But do they? I doubt it. Have some proportion and humility and take a pay cut.

This from kinkajoukid is spot-on.

I don't think it's on that some charities target people on tight budgets outside discount supermarkets.

Why do people think that being highly paid is necessary to having the right skills and experience to run an organisation.

Everyone in an organisation has a role to play. There’s no need for there to be such a huge disparity between the CEO and everyone else. The only people that say so are those that benefit from such pay (to justify their existence) and people have bought it.

@Johnnycomelately1

What I am saying is that any additional incomes are suppose to be spend on elderly care and not CEO salaries. That's the law. But they dodge it through 3rd party providers.

The report is new, so I haven't found any English articles for it yet. Maybe within a day or two it will appear on dutchnews.nl

Yeah, my Dutch isn't up to much .

Right, last comment on this because I do get the frustration.

The reality is that most CEO salaries are about 0.1% of the organisation's programme spend and actually, at the top, the CEO salaries are a smaller percentage of total spend than in the smaller charities. There is so much potential for waste in the rest of it that they're kind of irrelevant, and the biggest waste is that whilst many charitable programmes (domestic and international) are well meaning, they don't actually work in terms of driving sustainable social change and a lot of them don't even have a system for measuring impact (vs just outputs- number of people served).

Best way to judge the value of the CEO is therefore by the impact of the organisation. Think of yourself as an investor- basically, is this organisation delivering the returns that I want to see in terms of social change at a reasonable price point?

This is admittedly hard for retail donors, because you don't often have access to that info, so my advice for international development type charities is to follow the specialist foundation and development agency (not corporate donor) money because they will have kicked the tyres pretty hard/ been on multiple site visits/ had long chats with the CEO and programme staff/aligned everything with the SDGs etc.

Similarly, with domestic charities, check out who else is finding them and google the funder.

That's not to say that professional foundations don't ever fuck up- there is always risk in both piloting new interventions and scaling them up, and actually, you need to factor in failures, but there are some really really good charities out there.

I understand the point you make about attitude kikja as that's more of a personal call, but the skills stuff is entirely speculative. It's one thing to feel that someone doesn't have the right attitude if they won't do it for below a certain amount. But the idea that this suddenly means their skills are in question is not at all persuasive.

@Johnnycomelately1

I don't want to think of myself as an investor. I am either a customer, employee, volunteer or beneficiary.

I do not want my hard earned money or hard work to line the pockets of people who are already overpaid with their base salary, just because they happen to be upper-management. Without people like me, they wouldn't have a job in the first place.

Also it galls me that poor people give a much higher percentage of their income to charity

Archery and kinka I agree with you both there, but the base level inequality is a crap taxation system. Many charities would barely need to exist if upper-tier wealth was properly taxed, public services were properly funded, and the UK took its international responsibilities seriously. That way poorer people wouldn't be contributing unequally. Recent info on tax havens is very pertinent here-what Louis Hamilton dodged paying on his private jet would have funded 17 Sure Start centres for a year. That shit absolutely dwarfs the exec pay issue.

For those who oppose this salary level on principle, and who think charity CEOs should be willing to work for much less than they might get elsewhere, I'd be interested to hear whether you would still think this if the lower salaries resulted in a less capable CEO, for example someone who didn't get the funding in or have the influence for lobbying (and also the knock on, eg some posters have mentioned finance directors too).

I appreciate that most of you think this wouldn't happen, but if you'll humour me for a minute... let's say it did. Would you accept paying 167k if it meant getting someone in who brought in a lot more funds and had a lot more influence than the 125k candidate, the 90k candidate?

As I'm asking the question I think it's reasonable to expect me to answer it myself. If the NSPCC could get someone in with the same level of influence and ability to fundraise with a lower salary, I'd have mixed feelings. I'd be happy if there were more money available for other things such as lower paid staff, resources etc. But I would also be worried in case it fed into the damaging, ignorant but still very widely held view that people working for charities should automatically be willing to do it for much less than they could get elsewhere.

If there were some mechanism to get round this, that would be ideal, like if they were specific that the 20k off was going to be evenly split amongst all staff earning more than 5k less than the going rate for their field or something. Obviously that would make no monetary difference to the individuals concerned in an organisation like the NSPCC, as there would probably be so many, but if it sent a message, that would be different.

I hope at least some of you will be willing to play!

Internet

Sorry, when I said think of yourself as an investor, I meant, think of yourself as an investor in society. When people give to charity, they typically don't really think of the impact they want to see. They just see what they think is a "good cause" and donate to it. But you don't need a highly paid CEO for that donation to be wasted if the organisation isn't impactful.

For example: In China an NGO did a huge project where they were giving children in remote impoverished villages an egg every day as part of a nutrition programme. This was on the back of a research report which showed cognitive delay as a result of malnutrition. Great.......except actually not because the malnutrition was specifically iron deficiency and eggs are not a good source of iron. Total waste of money, albeit with the best of intentions. I don't know the conclusion to that but I imagine the funder was pretty pissed off.

If funders don't hold the charities they fund to account, then charities don't need to be efficient. Now rightly, that role falls mainly to the large funders, but retail funders can also play a part.

So, bottom line, I agree with you. You're paying their salary. If you don't like the CEO's salary, don't fund them. Fund someone else.

Charity’s should not pay their management such high salaries, whilst expecting the workers to receive so little wages in comparison.

The ridiculous situation where ordinary working people in this country find themselves claiming some type of benefit ( tax credits) to make up their wages to a living wage, whilst the higher management are paid exhorbitant wages is damning of society as a whole.

And to say they are paid for their expertise is trite. Lots of people have these skills in various different companies.

There should be an embargo whereby the highest paid wages can only ever be a set multiple of standard workers’ wages in a company.

I worked for a company in management position, whilst my spouse in a equivalent position earned twice my wage, and where staff under me were paid varying amounts, from double my wage to half of it.

There needs to be fair standards in private companies too.

Isa I guess the reality of it is that in the very large charities, you're looking at a tailored and pro-active recruitment process, so there will be a number of candidates with their salary expectations, and it's up to the trustees to make a judgement call on what any of those options is worth and should be paid and you basically have to rely on them to get it right. I doubt they always do, but yes, personally, IMO they should be looking at it on a bottom line to organisation

If a CEO gets paid 50k more but delivers 60k more than an equivalent potential CEO, then they should have got hired. Now, that's obviously oversimplifying it, because how do you value relationships (e.g. if one CEO can get a meeting with Xi Jinping and the other one can't?).

But I agree, it's not "who can do this job adequately at the lowest price point" but "who can do this job best?"

Tbh charities are much better for salary multiples than other sectors. Someone spoke upthread about CEOs not getting more than 10 x the salary of the lowest paid worker. Given that full time NMW is over 15k, 164k isn't far off that principle.

Isa I appreciate the thought-experiment, but I'd find it really difficult to play, because I really don't believe that would happen.

I am willing to support charities that spend money on fundraising, advertising, admin, and all the rest of it, so I suppose if I was forced to play then yes, maybe I would be prepared to play a higher salary.

But I just don't think in reality that's the case.

This is such an interesting discussion- have really enjoyed reading it. I’m a trustee for two small local charities (just been appointed as treasurer of one), neither of which are big enough to need a CEO, and I also work partly on audit of public sector and NFP entities.

Talk1nPeace I’m interested in what you say that it’s not possible to ring fence donations? My understanding of fund accounting is that if donations are made in response to say a particular appeal, they must be spent for that purpose unless