An executive decision; three things the charity CEO salary maelstrom taught us and what to do about it

The public really do care about charity CEO salaries

In our research with the public through our awareness monitor CAM, we see that how charities spend their money really matters.

The public really do care about charity CEO salaries

In our research with the public through our awareness monitor CAM, we see that how charities spend their money really matters. Of course, there are those who say the public shouldn’t care about overheads and should focus on impact. Well you live in your ivory towers and we will keep trying in the real world that the public inhabit. Again and again and again, the public tell us that the size of CEO salaries, the level of ‘admin’ costs and how their money is used really matters to them.

Is it really surprising that somebody giving up £10 from a pension or a limited salary feels aggrieved when they discover that their money is used to pay a salary many times that of their own? Apparently to Stephen Bubb it is. He said as much on the Today programme. I have no idea what the evidence base is for his assertion that charity CEO salaries don’t worry donors, but my fear is that he doesn’t have one.

We are releasing our evidence on what the public think about these issues in powerpoint format and as a 15 minute video of me presenting the data. You can watch it here. And if you doubt our research, read the comments on the both the Guardian and Telegraph websites. Right-wing plot? Not unless you think Guardian readers are in on the conspiracy.

The sector has been caught like a rabbit in headlights

Just as surprising as the fact that some don’t believe that CEO salaries are a problem is the fact that the sector has been so unprepared and unwilling to defend its salary practices. At times like this, the sector doesn’t seem to exist and it’s every charity for themselves.

A few did a good job of doing interviews – such as Christian Aid and Oxfam – but even then, the key messages were not clear. One interview described the work of the Telegraph as an ‘attack’. It’s a dangerous line indeed to describe publicising a charity CEO’s salary as an attack, particularly coming from charities which are committed to accountability and transparency. 

Stephen Bubb’s line of defence appears to be ‘donors don’t care and these are very difficult jobs’. They are very difficult jobs, but I doubt many listeners to any of the interviews went away feeling reassured. An outcry over charity CEO salaries is entirely predictable. Indeed, what has been discussed is just the tip of the iceberg. There are many charities far smaller than Oxfam or Red Cross who pay their CEOs comparable amounts, while there are also many sector employees that aren’t CEOs who earn over £100k.

We need to work out better ways to justify the paying of ‘high’ salaries

I think we need to pay charity CEOs over £100k to get good candidates. I give to more than 10 charities that pay their staff over this amount and have no problem with doing so. However, the arguments that have been used to date to defend these salaries are patchy at best. Here are the ones that I have heard:

  • These are very difficult jobs. We need to pay decent salaries to get high calibre CEOs.
  • Charity CEOs don’t get paid much compared to almost any other profession
  • Our CEO took a pay cut to come and work for us
  • We pay less than other similar sized charities
  • Our CEO hasn’t had a pay rise for 3 years
  • The CEO’s salary is a tiny percentage of our total income
  • Our CEO’s salary is benchmarked against a basket of measures
  • Our CEO’s salary is based on his/her performance

There are probably a number of other arguments too (we’d love to hear yours - please write them in the comments section). It’s hard to know which of these are persuasive with donors, so later in the year we hope to carry out some focus groups with donors to find out. This should help charities work out the best way to take donors and the public with them.

One thing is for sure; this is not the last time charity CEO salaries or costs will be an issue in the media. At very least next time, the sector and individual charities should be better prepared.

 

Have we paid enough attention to the issues? Or have we cost ourselves dearly? Have your two penneth and leave us a comment below.

Check out our first ever YouTube video with an interactive presentation by Joe on what this all means for charities
You can download the slides on what the public think of charity spending from the right hand corner of this page.

 

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What do the public think of charity spending and CEO salaries

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