Thursday 17 December 2015

A Professional Sector

The Times today ran a story attacking excessive chief executive pay. This is not the first time such attacks have been made.

As on so many occasions, such stories are unjustified. Yes, over 1,000 charity chief executives earn six-figure salaries. Yes, this is a significant sum of money. But there is more to pay than the simple figure. It is about value for money.

People understand that £50k spent on a chief executive is £50k wasted if they fail to deliver. Equally, investing £150k in a chief executive who pushes your charity to fulfill its aims is a sound investment. If a chief executive is worth the money, then they should be paid that.

What the Times don’t understand is that this is about value for money. Chief executives doing a good job are worth their salary. If not, then that is a matter for the trustees and supporters of that charity.

This is the reality which we ignore at our peril. At this time of year, many vulnerable people are depending on charities. Those charities doing the most to help will appropriately pay their staff. This is something which the Times would do well to note.

And wouldn’t it be nice if for once we had some defence from Mr Shawcross when charities are attacked. It is time the Charity Commission stood up for a professional modern sector.

And to those who say that charity chief executives don’t perform well enough to earn their salaries, I leave you with this quote from one Warren Buffet:

"The nature of the problems that a foundation tackles is exactly the opposite of business. In business, you look for easy things, very good businesses that don't have very many problems and that almost run themselves... In the philanthropic world you're looking at the toughest problems that exist. The reason why they are important problems is that they've resisted the intellect and the money being thrown at them over the years and they haven't been solved. You have to expect a lower batting average in tackling the problems of philanthropy than in tackling the problems of business"

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