Charity Commission chairman issues charity pay warning

 
William Shawcross William Shawcross questioned whether high salaries were "fair" to donors and taxpayers

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Large salaries paid to charity staff could "bring the charitable world into disrepute", a regulator has warned.

Charity Commission chairman William Shawcross said organisations must ask if pay levels are "really appropriate".

The Daily Telegraph reported 30 staff at 14 leading UK foreign aid charities were paid £100,000 or more last year.

Charity leaders' organisation Acevo said the salaries for these "very demanding jobs" were not excessive compared to other sectors.

Mr Shawcross, who was appointed last year on a £50,000 annual salary to work two days a week, said the commission could not tell charities how much they should pay their executives, but urged them to be cautious.

"In these difficult times, when many charities are experiencing shortfalls, trustees should consider whether very high salaries are really appropriate, and fair to both the donors and the taxpayers who fund charities," he said.

"Disproportionate salaries risk bringing organisations and the wider charitable world into disrepute."

'Very demanding'

British Red Cross chief executive Sir Nick Young was paid £184,000 last year, two Save the Children executives received more than £160,000 each and Christian Aid chief executive Loretta Minghella was paid £126,072.

The number of staff being paid more than £100,000 at the 14 charities it focused on had risen from 19 since 2010, the newspaper said.

Start Quote

We can't - and shouldn't - compete with salaries in the private sector but we need to pay enough to ensure we get the best people to help our work to stop children dying needless deaths”

End Quote Save the Children

The British Red Cross said the pay of its chief executive was far from secret and its annual accounts were available on its website.

"The salary of our chief executive - which is set by the Board of Trustees, and benchmarked against, and competitive with, other non-profit organisations of similar complexity - reflects the enormous responsibility the position carries," a spokeswoman said.

A Save the Children spokesperson said: "To run an organisation that reaches 10 million children in more than 50 countries, with thousands of staff, in some of the toughest places in the world, takes real leadership, experience, knowledge and skill.

"Without this talent we would not, in the past five years, have almost doubled our income from £161m to £284m, enabling us to reach more of the neediest children on earth than at any point in our 90-year history.

"We can't - and shouldn't - compete with salaries in the private sector but we need to pay enough to ensure we get the best people to help our work to stop children dying needless deaths."

Christian Aid said "staff must reflect a large variety of abilities and disciplines" for the organisation to run successfully.

Dame Barbara Stocking, a former chief executive of Oxfam who was paid more than £100,000 a year, said she took a 30% pay cut from her previous NHS job to take up the post with the charity.

She told BBC Radio 4's World At One: "These are very demanding jobs, very long hours. The range of the business you cover, from a retail network in the UK to international situations, are hugely complex."

'Deeply unhelpful'

The 14 charities make up the Disasters Emergency Committee (DEC), which co-ordinates work after disasters overseas.

A spokesman said executive pay at its member organisations was "broadly in line" with other charities.

"To ensure the most effective use of appeal funds, a balance must be struck between minimising overheads and ensuring a robust management system is in place," he said.

"The proportion of DEC appeal funds that can be spent by member agencies on the UK management of their disaster responses is capped at seven per cent."

Sir Stephen Bubb, chief executive of the Association of Chief Executives of Voluntary Organisations (Acevo), told BBC Radio 4's Today programme that Mr Shawcross's remarks were "deeply unhelpful" and "wrong".

He said the average salary for a charity chief executive was £58,000 and the higher salaries were "entirely justified".

Sir Stephen Bubb: "Chair of Charity Commission is being deeply unhelpful"

"The big national and international charities are very demanding jobs and we need to attract the best talent to those jobs," he said.

"I know some of the people who are on these so-called excessive salaries who have taken pay cuts to run a charity."

Sir Stephen denied the high salaries could put off donors.

"This simply isn't an issue for donors. Donors are more concerned about the outcomes, the performance and the efficiency of these organisations," he added.

Every charity in England and Wales is required to publish how many members of staff earn more than £60,000 and their accounts are publicly available on the Charity Commission's website and on most charity websites.

"Many charities go further than the minimum requirements for reporting staff salary levels," a spokeswoman for the Charity Commission said.

"We would always encourage donors to use this information when making decisions about who they wish to give to and to help them understand the complexities of running any charity in the 21st century, but ultimately it is for all charities to explain the decisions they make about all forms of expenditure."

 

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  • rate this
    +6

    Comment number 542.

    As a rule I have no objection to high salaries for good people employed in significant roles but where charities are concerned, where the norm has become direct debit contributions, they essentially become ordinary businesses making decisions based on fixed and floating income and outgoings.

    Where my offering becomes a balance sheet number and contributes to a ratio covering salaries I'm out...

  • rate this
    -3

    Comment number 541.

    I've seen well meaning volunteers in disasters like the tsunami - fly in, throw cash at the first 'victim' they see, have photo taken with photogenic kids and fly out again feeling good about themselves and leaving a rich 'victim' behind while people needing help don't get it. Getting a good job done needs a professional. Do you take your car to a good mechanic or some bloke who'll fix it cheap?

  • rate this
    0

    Comment number 540.

    The ignorance of Mr Shawcross' comments and the manner in which he casually insults an entire sector, is astonishing. I have just sponsored the CEO of a major charity who was spending their free time raising a substantial amount of money for it by participating in a gruelling physical activity. Yes, some people are bad value for money, and Mr Shawcross, seems to be one of them.

  • rate this
    +3

    Comment number 539.

    Irony! A man who is paid £50,000 for working two days a week (equivilant to £125,000 per annum) calls into question the salaries of people who work five days a week at similar levels! The sector has to pay reasonable salaries to attract the best talent to ensure these charities are run efficiently. Perhaps we should limit the salaries of the heads of NGOs like the Charity Commission instead

  • rate this
    +3

    Comment number 538.

    One very good thing to come out of this report is the fact that people are waking up to the fact that big charities have become a cash cow to some rich bosses who do not deserve it
    We all should support our local hospice, youth centre , and many other local support groups who are doing a fantastic job with little reward.
    I would never ever give to any mainstream charity organisation again.

  • rate this
    +43

    Comment number 537.

    A radical rethink of salary structures across all industries is needed. We have a bloated and over remunerated minority who's abilities are not commensurate with society as a whole. 5x, 10x or even 50x average salary does not equate to a similar multiplication of ability, only a perception in order to justify the outpourings of shareholder or public funds and to maintain this privileged minority.

  • rate this
    -2

    Comment number 536.

    This is a societal problem, it will not be sorted until the generation is called up by their maker; waiting in the wings are those who will start the same all over again; it is human to err, to have frailties, but Thatcher's greedy young generations are only interested in their bank balances while their souls are as corrupt as hers, the partner of the owner of Consolidated Mines.

  • rate this
    +4

    Comment number 535.

    513 Blistering Blast of Truth: if only your posts lived up to your name! I've been an unpaid Trustee in two charities that are national organisations but with local operations and I can assure you that they are audited annually, financially and in terms of the quality of service they offer to clients. Learn about what you're pronouncing on, rather than letting your prejudiced ignorance show.

  • rate this
    -4

    Comment number 534.

    I do not give a penny of my hard earned wages to registered charities. Most of the ones I know of are little more than fronts for directors to make money under the guise of a charity. In some cases donated equipment is actually SOLD to the needy recipients.
    In my opinion, very few charities are aiding the cause they claim to.

  • rate this
    0

    Comment number 533.

    "Mr Shawcross, who was appointed last year on a £50,000 annual salary to work two days a week ...... "

    Maybe he should heed his own warning and take a pay cut.

  • rate this
    -1

    Comment number 532.

    This is another example of why you should never give to organised charities, no matter how hard they try to tug at the heart strings. No matter how much you give they always want a bit more, and then you hear about it being wasted on huge salaries. It's no longer about genuinely aiding vulnerable people so much as it's about maintaining the illusion and the catharsis of generosity.

  • rate this
    +3

    Comment number 531.

    @513: All charities with income over £500,000 are required to have an audit, as anyone who understands the sector will know.

    Having seen the chief exec of a charity not take business class travel (despite the board of the charity suggesting it in order to help his productivity) the idea that there is some sort of general malaise in all charities is misleading.

  • rate this
    -1

    Comment number 530.

    'This simply isn't an issue for donors. Donors...

    Well, it certainly concerns me. Why should I do my best to help the animals or humans, at cost in terms of time and money, when the charity personnel are taking home vast sums which could be spent on the needy animals and humans? We like to think that we are working WITH the charity and its personnel, the first concerned, not IN SPITE OF.

  • rate this
    +9

    Comment number 529.

    As a director of a small charity I'd like to thank those who are drawing distinctions. Blanket criticism of charities is unjustified. In our case we have a board of directors who give a lot of time and don't take a penny and a team of committed staff who are all paid less than they would be elsewhere. By all means check on who you give to but times are hard please don't stop completely.

  • rate this
    +1

    Comment number 528.

    Shawcross complaining salaries are too high give me a break, £50000 for working two days a week get over yourself!
    OK I agree many CEO are paid far too much but Mr. Shawcross isn't doing too badly is he?

  • rate this
    -3

    Comment number 527.

    Hate to tell all you tin shakers, but your contribution is minor. For a big charity 2/3 comes from legacies and 1/4 from commercial companies sponsoring and bank interest & ethical investments. Only about 1/12 comes from fun runs and they make little or no money, because they require a lot of outlays and labour. Essentially, private donors are good PR and sources of legacies, nothing more.

  • rate this
    +1

    Comment number 526.

    @513 Actually quite a lot of auditing goes on, certainly in Scotland OSCR are vigorous to say the least, and quick to investigate complaints.
    At least this has been my experience as a volunteer for a local charity

  • rate this
    +1

    Comment number 525.

    Perhaps we need a major shift in our own attitudes towards charitable undertakings. If we all (including top execs) donated 10% of our time to society, then it may go a long way to alleviating many of the current issues (senior care, nursing, homeless etc). A more inclusive society?

  • rate this
    +5

    Comment number 524.

    About time this issue was exposed. I am a trustee of a local charity and none of our committee and staff draw a penny - not even for expenses.
    It is probably not realistic for large charities to be run entirely by volunteers but surely they should recruit people with the same spirit of giving. Aid workers, including doctors, rush off to Africa for very little reward but CEOs expect a large salary.

  • rate this
    +2

    Comment number 523.

    charity's are the equivalent of quangos for elites to sit on nice fat wages for bugger all .. just one more example of the "money go round" these people live on .. nice work if you can get it eh?!

 

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