Ever since Lord Hodgson’s review of the Charities Act recommended that charities with an income of over £1 million have an automatic right to pay their trustees, arguments have raged on both sides. Lord Hodgson and his supporters say that the change will help charities attract the best and brightest for the boardroom. Opponents are concerned that payment will further erode the voluntary ethos that the charity sector is based on.
At first glance, it certainly seems strange that at a time when charities are turning more and more of their entry-level jobs into unpaid internships they should simultaneously decide that the most senior members of their organisation (who have always been volunteers, with few exceptions) deserve to be financially rewarded for their time.
Compared to the often full-time job descriptions of interns, the role of a trustee seems to be ideally suited to a volunteer – a few hours a month as well as the occasional board meeting, with out-of-pocket expenses covered. Do charities really want to be run by people who aren’t willing to give this time freely to the cause? And if money can’t be spared from charitable activity to pay interns, how can charities afford to pay trustees?
Others have been concerned that this move could lead to an 'arms race', where charities are forced to pay trustees in order to attract the right calibre of candidate because their competitors are doing the same. Ultimately, charities could end up with trustees no better or worse than those they currently have, but at a much higher cost.
But perhaps the most compelling argument against paying trustees is that it could put at risk the carefully nurtured and well respected public image of charities as voluntary organisations. We know from our research that charities are currently enjoying a boom period in public trust, with 64% of people saying they trust charities a great deal or quite a lot. This has come at the same time as a decline for other institutions which the public have come to see as greedy and financially motivated – banks and the government. Could the payment of trustees become the bankers’ bonuses or MP’s expenses of the charity sector?
We know that staff pay is one of the biggest issues donors worry about when choosing a charity – 57% of the public say they would be off put by charities spending too much on staff salaries. Conversely, donors find voluntary service highly reassuring in charities, with 42% saying they would be confident a charity would spend their donation well if it was run mostly by volunteers.
So while some in the sector might sniff at old fashioned ideas of charities’ “unique ethos”, the public at large certainly don’t share their beliefs. Rightly or wrongly, the public are more likely to trust (and therefore more likely to support) charities they think are run by committed volunteers rather than financially-motivated staff.
With only 28% of people currently believing trustees are paid, charities should think carefully before potentially risking public trust and support by making the decision to pay them. I think there is much to lose and little to gain.