Wednesday, 7 August 2013

Charity Pay; the critics.



The Telegraph attack on charity CEO pay quoted extensively from a Tory MP, Priti Patel. It is clear she is one of those behind this Telegraph campaign so it is important that we tackle the arguments she makes. She is an influential MP so let's examine what she argues.

She says “hard pressed taxpayers deserve to know how their money is being spent".

But these are not taxpayer donations; they are payments for contracts to deliver services. These contracts are subject to full scrutiny and if the Government does not think charities are delivering, they can cancel the contract. We are fully accountable for delivery and for the outcomes we achieve.  The reality is that charities deliver in spades. They provide outstanding value for money, which is why the sector is contracted to do this vital work ahead of the public or private sectors.

To examine this argument further: it implies that any organisation delivering contracts for Government should not pay their CEOs high salaries. So is this criticism made of the salaries of the CEOs of Capita, Serco, G4S and so on? They deliver with taxpayer’s money for their contracts. They are on much higher salaries than anyone in our sector. Should they be forced to take a pay cut or is this argument suggesting one rule for commerce and another for charity?

Surely our critics understand the principle of supply and demand. Commerce justifies paying good salaries to attract the best leaders. We need to do the same. I'm always amazed we get such brilliant leaders when they could earn so much more in the private sector- or indeed the public sector. The CEO of Oxfam, one of the words largest and most effective charities, gets less than half the salary of the CEO of Wandsworth Council!

Let's not forget that the 14 charities that Priti is criticising turn over £1.73 billion. These jobs are huge and complex, demanding and problematic- they require top professionals. Trustees don't pluck salary levels out of thin air - they benchmark against comparable roles and balance that against the financial position of their charities in order to get the talented, skilled leaders they need.

Is it helpful to demean good people as Priti did when she talked of “lining the pockets of unaccountable charity executives"? I know these CEOs.  They are fine leaders and strongly ethical in their behaviour. To suggest they are in this for personal gain is to undermine not just these individuals but the staff and volunteers of those fine organisations. As I know, they are totally committed to the task of helping the most vulnerable communities across the world in some of the most dangerous and difficult circumstances. This is a tawdry attack and unworthy of an MP.  
 The charity world is transparent.  We are accountable to our beneficiaries. We are open about our campaigning.

I suggest that Priti Patel spends time with the CEOs of Oxfam and the Red Cross, of Christian Aid and Merlin. See the work they do and meet the leaders of those great bodies. Then see if she will justify her attack on them “lining their pockets".

I thought I would reproduce an excellent blog from a Civil Society journalist, Celina Ribeiro. She puts the argument so much better than me!

“I agree with William Shawcross’ comments on charity executive pay. Absolutely. 100 per cent.

In yesterday’s Telegraph expose on the salaries of executives at international aid charities which are members of the Disasters Emergency Committee, Shawcross was asked to comment on the fact that now some 30 executives at those 14 charities receive incomes in excess of £100,000.

In the context of his interview, the Charity Commission chair is reported to have said: “Trustees should consider whether very high salaries are really appropriate and fair to both donors and the taxpayers who fund charities… Disproportionate salaries risk bringing organisations and the wider charitable world into disrepute.”

Spot on. Hit the nail on the head.

However, where I would disagree is on a rather critical point, an inference, really.

These salaries are not disproportionate. These salaries are proportionate, appropriate and fair.

I’ve done some number crunching myself. Combined, these 14 charities in 2012 (or the year ending within 2012) were responsible for £1.73bn of income. Raising, stewarding and spending £1.73bn of income – within just 14 organisations – is a mammoth task. Huge. One requiring an extraordinary amount of leadership, responsibility, skill, experience and expertise – and the last time I checked, these are precisely the basis for remunerating any staff, anywhere.

By the way, that £1.73bn in income in 2012 – that was up £100m on the previous year. In a recession. A feat, I would argue, worthy of proportionate, appropriate and fair financial reward.

Are charity executives rewarded by more than their salaries? Yes. Of course they are. They are making the world the better place. Their decision to focus their skills and experience on working for good – as opposed to for banks, food companies, law firms and the like – should not be to their financial detriment. They should not attempt to compete with the private sector, wherein one may argue oftentimes wages are neither proportionate nor appropriate, but - essentially – you get what you pay for.

If we value the work that charities do, if we believe that Save the Children and the British Red Cross are important and effective organisations, then we need to value those people who take that responsibility on their shoulders.

Now this is an argument made well and repeatedly in the charity sector. It is one that many of our civil society readers will be more than familiar with. And it is an argument which needs to be proactively pushed out to the wider world as a whole.

So it is a surprise that the chair of the Charity Commission would be airing statements on salary pay which would appear more at home with the views of a casual observer who believes that charities are managing to immunise hundreds of thousands, that respond to large scale humanitarian crises in the world’s most challenging environments – politically and physically-, that make our planet a safer and more equitable place for every one within it – that these organisations, tasked with one of the most important challenges of our day, are run by volunteers and do-gooders willing to accept a low wage for their passions, expertise and efforts.

I don’t expect Shawcross to be an advocate of the charity sector. That is not his job. He is a regulator, and he should be judged on how well the sector is regulated. However, it is comments such as his which “risk bringing organisations and the wider charitable world into disrepute”. Not the fact that the man who leads an organisation which turns over more than £200m a year is paid £184,000 a year.

That is not the scandal.

Quite right. Or as one of my members put it succinctly when she emailed me:

"I just wanted to say that I am amazed that the Chair of the Charities Commission could behave so irresponsibly towards the sector of which he should be a firm champion. He clearly has no idea about the CEO professionalism within the third sector, and, therefore, the warranted levels of pay, and he has done inestimable damage to the public’s perception of charities. This is very likely to have a knock-on effect regarding donations at a time when charities are struggling to fund their much needed services. This may very well de-stabilise smaller charities significantly."



8 comments:

Geoffrey Frost said...

Say what you like fella but that's charity finished for me. Never again will I give to these fat cat organisations. There is no reason why these fat cats deserve the big increases in pay when most of us have been cut back. That's the trouble with you well-heeled idiots you think nobody bothers about it but believe me many people do. Thank goodness for the Daily Telegraph for exposing what I consider abuse of charity donations.

Celina said...

Hi Stephen,

I'm very pleased that you and others have found the sentiments in my blog of interest.

The original blog - with comments - is here. http://www.civilsociety.co.uk/governance/blogs/content/15840/i_agree_with_william_shawcross_charity_pay_should_be_proportionate

Happy to be part of the debate wherever it is, but would ask for links at least to the original work.

TORAN rai said...

Charity isn't Capitalism! It is LOVE (Voluntary Practice of Benevolent Giving and Caring). It is not Greed and HATE!

Jim Brown said...

There's a well known saying that springs to mind "when in a hole, stop digging!"

This man is an absolute liability for the sector. See my blog here:-
'Bubb Brings Sector into Disrepute'

http://probationmatters.blogspot.co.uk/2013/08/bubb-brings-sector-into-disrepute.html#comment-form

Robertson said...

At least the Telegraph is at last exposing what a number of people have heard second hand. A lot of charities are a gravy train for ex politicians and public servants. It now appears they hard sell from door to door asking you to sign up to monthly donations through direct debits.....what is worrying is that the charities employee individuals or companies whose commission rate on such sales is up to 50 per cent. I for one do not want to give to any such charities......I will stick to help for heroes. It is certainly clear Mr Bubb that you are part of the gravy train.

roberte207 said...

Bubb, you're a disgrace. The smugness drips off you like fat from a kebab.

Andrew Thomas said...

Proper charities are suffering by the fatcat quangos defrauding taxpayers being allowed to masquerade as charities.

Andrew Thomas said...

These fatcats are deluded as this is pure exploitation corruption and greed.