Paying Charity CEOs large amounts isn't as bad as it looks

A turn-off, but not a scandal.

The Charity Commission warns that spiralling levels of chief executive pay risk bringing organisations and the wider charitable sector into disrepute, following news in the Telegraph that 30 charity chiefs are paid more than £100,000.

High levels of pay and administration costs can be a real turn off. This comes from a natural desire to ensure that money is well-spent, which for a number of people means as much money as possible goes directly to the front-line, to helping people most in need.

To begin with, if all the money goes to the frontline, but staff at the front-line are being ineffective because the strategy’s poor, then that money’s been badly spent. For us, there isn’t a level at which pay in the charity sector becomes too high; charities are trying to solve some of our most stubborn social problems and they need to attract talent to be able to do that.

Pay in charities is a much more finely balanced argument than is usually supposed. We’ve put together some advice on how donors can think about whether or not giving to a charity with high salaries should be a cause for concern:

First, and most importantly, it’s all about impact. Knowing that children have been sponsored or that schools have been built isn’t enough: you need to know exactly what difference the charity is making, and how this is happening. Action on Hearing Loss’s annual report provides a summary of what it has achieved against its aims, which helps donors decide whether the organisation spends their money well.

Second, you need to consider the complexity of the charity. The CEO of Oxfam is paid £120,000, and is responsible for a £360 million budget, 700 shops in the UK and 5,000 employees and 20,000 volunteers who work in over 90 countries across the world—some of them very risky places to be. £120,000 doesn’t feel like a lot in the context of that job description. The CEO of Next also runs 700 shops (but no humanitarian aid) and gets nearly £1.5m. Of course, this is all proportionate to the task and budget at hand: you don’t want a £500,000 income charity to spend £100,000 on its CEO’s salary.

Third, although its difficult to tell from the outside, what value is the CEO bringing? Have they increased the charity’s profile and fundraising? Have they devised a good strategy? If the case is that you need to pay up for talent, then supporters should be able to see the fruits of that talent.

Finally, it’s worth thinking about the quality of the staff throughout the organisation. If the charity is making an argument that they need to pay well to attract the best staff at the top, then you want them to apply the same logic to front-line staff. Medicins Sans Frontières has a rule that the chief executive can’t be paid more than three times the pay of the lowest paid member of staff.

By making the judgement call based on these factors — and not on gut feelings about pay — more money will be well spent. We’d like to see the impact of the UK’s leading aid charities make the headlines, instead of six-figure salaries that really say nothing on their own.

Angela Kail is head of Funder Effectiveness at New Philanthropy Capital, which helps donors choose effective charities

This piece first appeared on Spear's.

Photograph: Getty Images

This is a story from the team at Spears magazine.

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Richmond is a victory for hope - now let's bring change across the country

The regressives are building their armies. 

Last night a regressive alliance was toppled. Despite being backed by both Ukip and the Conservative Party, Zac Goldsmith was rejected by the voters of Richmond Park.

Make no mistake, this result will rock the Conservative party – and in particularly dent their plans for a hard and painful Brexit. They may shrug off this vote in public, but their majority is thin and their management of the post-referendum process is becoming more chaotic by the day. This is a real moment, and those of us opposing their post-truth plans must seize it.

I’m really proud of the role that the Green party played in this election. Our local parties decided to show leadership by not standing this time and urging supporters to vote instead for the candidate that stood the best chance of winning for those of us that oppose Brexit. Greens’ votes could very well be "what made the difference" in this election (we received just over 3,500 votes in 2015 and Sarah Olney’s majority is 1,872) - though we’ll never know exactly where they went. Just as importantly though, I believe that the brave decision by the local Green party fundamentally changed the tone of the election.

When I went to Richmond last weekend, I met scores of people motivated to campaign for a "progressive alliance" because they recognised that something bigger than just one by election is at stake. We made a decision to demonstrate you can do politics differently, and I think we can fairly say that was vindicated. 

There are some already attacking me for helping get one more Liberal Democrat into Parliament. Let me be very clear: the Lib Dems' role in the Coalition was appalling – propping up a Conservative government hell bent on attacking our public services and overseeing a hike in child poverty. But Labour’s record of their last time in office isn't immune from criticism either – not just because of the illegal war in Iraq but also their introduction of tuition fees, privatisation of our health service and slavish worship of the City of London. They, like the Liberal Democrats, stood at the last election on an austerity manifesto. There is a reason that we remain different parties, but that doesn’t mean we shouldn't also seize opportunities like this to unite behind what we have in common. Olney is no perfect candidate but she has pledged to fight a hard Brexit, campaign against airport expansion and push for a fair voting system – surely progressives can agree that her win takes us forward rather than backwards?

Ultimately, last night was not just defeat of a regressive alliance but a victory for hope - a victory that's sorely needed on the back of of the division, loss and insecurity that seems to have marked much of the rest of this year. The truth is that getting to this point hasn’t been an easy process – and some people, including local Green party members have had criticisms which, as a democrat, I certainly take seriously. The old politics dies hard, and a new politics is not easy to forge in the short time we have. But standing still is not an option, nor is repeating the same mistakes of the past. The regressives are building their armies and we either make our alternative work or risk the left being out of power for a generation. 

With our NHS under sustained attack, our climate change laws threatened and the increasing risk of us becoming a tax haven floating on the edge of the Atlantic, the urgent need to think differently about how we win has never been greater. 

An anti-establishment wave is washing over Britain. History teaches us that can go one of two ways. For the many people who are utterly sick of politics as usual, perhaps the idea of politicians occasionally putting aside their differences for the good of the country is likely to appeal, and might help us rebuild trust among those who feel abandoned. So it's vital that we use this moment not just to talk among ourselves about how to work together but also as another spark to start doing things differently, in every community in Britain. That means listening to people, especially those who voted for Britain to leave the EU, hearing what they’re saying and working with them to affect change. Giving people real power, not just the illusion of it.

It means looking at ways to redistribute power and money in this country like never before, and knowing that a by-election in a leafy London suburb changes nothing for the vast majority of our country.

Today let us celebrate that the government's majority is smaller, and that people have voted for a candidate who used her victory speech to say that she would "stand up for an open, tolerant, united Britain".  But tomorrow let’s get started on something far bigger - because the new politics is not just about moments it's about movements, and it will only work if nobody is left behind.

 

Caroline Lucas is the MP for Brighton Pavilion.