Category Archives: Charity

The dangerous charity chief executive pay debate

There has been a lot in the press recently about how much charity chief executives are paid.

This is nothing particularly new. Pretty much annually the media decides to turn its glare onto the wage packets of senior staff, particularly chief executives, in the voluntary sector.

This time round the Telegraph kicked things off with an article entitled: ’30 charity chiefs paid more than £100,000′. Inevitably, the Daily Mail then couldn’t wait to stick its boot in, with the column ‘Hideous hypocrisy of the charity fat cats’. One little gem from said piece was: “It has emerged that for all their noble talk of helping the needy and emotive campaigns against inequality, senior figures in the poverty industry have been quietly pocketing hefty six-figure salaries.”

This dangerous, flippant sentiment angers and perplexes me, and I will briefly explain why here.

First, to get things into a little perspective, a paragraph from this Spear’s blog starts to demonstrate how things generally are back in the real world:

“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.”

I run a small business myself. Because I set it up I don’t, and never will have, the same salary expectations as a chief executive who does not own the organisation they are running. But I have already been able to start to appreciate just how difficult it is to run an organisation.

There are staff who are reliant on me for their jobs and their wage packets; suppliers, rent, rates, service charges, plumbers, electricians, and multiple other bills need paying every day – and the buck will always stop with me for that. If a customer is ever unhappy with their experience, if the council decides we are breaking a rule, if we get a terrible review in the press, if an accident occurs at the workplace, if the price of wheat increases, if someone calls in sick, if we have a break in and all our equipment and stock is stolen, if the business is flooded, if our VAT is miscalculated, this will ultimately always be my problem to deal with.

Already, I know that if I wanted to hand over all of these stresses and hours and responsibilities to someone else to manage the business for me I would need to pay them significantly for that.

If I then multiplied all of this by many hundreds or even millions and increased its complexity to include overseas work, lobbying government and negotiating with multiple sources of funding, I can only begin to imagine the pressure upon someone who is running a much larger, charitable, organisation. It is not the kind of pressure and level of responsibility that just any random person would be able to handle.

The kind of person who would be willing to take this on and could perform to a high standard would be able to get a very well-paid executive role in any sector.

In an equivalent private sector role it is likely that this person would be paid in the high hundreds of thousands, potentially a seven figure sum, with share options, a bonus, a plush office, and most importantly the knowledge that this pay packet would be likely to grow and grow.

In the charity sector, the Telegraph seems to have a problem with this person being paid £100,000. As a regular donor to more than one multi-million turnover charity, I would personally be quite worried about the calibre of chief executive in place if they were earning much less than that.

By Sophie Hudson

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We need to start standing up for the charity sector

Charities appear to have inadvertently found themselves in the middle of a media nightmare at the moment, all because of a valiant effort to defend their income and thereby the valuable services they provide for their beneficiaries.

I’m referring to the increasingly messy, and actually quite dangerous, growing debate which has been sparked by George Osborne’s tax relief cap announcement in the budget. In a nutshell, charities are against this cap, saying it will make donating more expensive and could therefore significantly reduce their income.

And I call the current situation a ‘media nightmare’ because somehow the charity sector has found itself on one side of a debate which has seen some of the most outspoken elements of both the left and right united on the opposite side, even if for different reasons.

Some on the left, exemplified this week for example by the Guardian’s Polly Toynbee in this piece, have happily seized on the opportunity to lay into the rich and the way they utilise charitable giving to dodge tax (indeed, how very dare Earl what’s-his-face give millions to a charity rather than buy himself a fourth yacht).

And on (what certainly looks like) the right, exemplified this week for example by editor-in-chief for MoneyWeek Merryn Somerset Webb in this quite unbelievable tirade against the voluntary sector, many have used this as an excuse to lay into charities, questioning the usefulness of their work and why on earth they should be subject to any relief at all.

But what few people (apart from the voluntary sector itself with it’s Give it back, George campaign) seem to be bothering to do with any great strength at the moment is shout about the wonderful work the vast, vast majority of the charity sector does, and explain that to do this work it needs money.

What if, God forbid, one of these journalist’s family members got cancer and because Marie Curie had lost out on a load of big private donations over the past few years (the problem with this cap is not just that charities get less per big donation, but that the rich will potentially give a lot less in the first place now), there wasn’t enough to fund a nurse to look after that person?

Or what if one of these journalists lived in an area where their local community organisation had to shut down, and slowly the threads that quietly held the most vulnerable parts of that community together started to unravel?

Oh and to Toynbee and others of a similar disposition on this, I don’t think that the family of the cancer victim needing Marie Curie, or the community benefitting from the invaluable work of the local group really care that the money used to pay for these services came from a rich banker, and that it took a £100 dinner to get her to give £10,000. I think they are just happy that someone decided to give this money away, be that for whatever reason it was, rather than keep it for themselves.

Yes, there are a few charities out there that should not fall under this label at all and the policing of the sector could of course be better. But, as we all know, real life doesn’t actually reflect the pages of the Daily Mail, and truthfully for every organisation that perhaps is a charity and should not be, I bet you could easily find at least 1,000 that are charities and fully deserve this status and the benefits this entails. We should not potentially disable all the good ones just because we’ve found five examples of bad ones.

Also, on the ridiculous argument that all our tax should stay with the government rather than being thwarted off to a load of ‘dangerous charities’, since when did the government spend tax-payers’ money exactly how we would all like it to?

This is the very worst time for the government to be potentially devastating the income of hundreds of organisations without which all of our lives would be unrecognisably worse.

The point is, whether you agree with tax relief for charities or not, (and I for one do – it’s not like the state is going to start doing this invaluable work instead and the vast majority of our population do not give anything like enough to charities but would be more than happy to benefit from their services if the circumstances warranted it) there are thousands of amazing organisations that have become used to this income, and whose donors have become used to this relief, and without it they could be seriously crippled.

Until at the very least a suitable way of offsetting any major funding damage such a measure could do to the sector, it would be utter madness to go ahead with this cap.

And right now, when the country is in a complete mess and it needs charities more than ever, and while charities are facing potentially billions of pounds of other funding cuts, this is not the time to risk going forward with a measure like this and just hoping for the best.

By Sophie Hudson

The tax relief cap is either confusing or stupid

For a government that is seemingly trying to push the philanthropy button hard, the chancellor George Osborne made a right mess of this year’s budget – the disapproving responses to which have only grown in size and negativity in the days since he announced his measures. 

The only real mention of charities and giving to charities was within the negative sphere of capping tax relief. In a nutshell, Osborne capped the amount of relief you can get at 25 per cent of your income or £50,000, whichever is higher.

On the face of it, this would seem more than fair in a time of extreme austerity. But when you look at the possible repercussions of this on charitable giving, it becomes a lot less fair, and incredibly confusing, given the high profile this government has been trying to give philanthropy. The measure makes is more expensive to give large donations to charities – and could therefore put a lot of wealthy donors off giving substantial gifts.

Coupled with a very insightful piece I recently read on Liberal Conspiracy – a post by Damian McBride which outlines how budgets are put together and why he therefore knew Osborne was in trouble –  all of this gives me very little confidence that the government has  any idea what it is doing, or that there is a huge amount of communication going on across departments.

Making it harder to give to charity, and thereby decreasing the amount given to charity, seems like a mean, unpopular move at the best of times. But doing so in a time of austerity when charities have enough cuts to deal with as it as, and for the move to be made by a government that has harped on relentlessly about making giving a “social norm” seems mind-boggling at best and utterly stupid and/or deceitful at worst.

I can only really think of three possibilities that could explain what happened here, none of them good:

1. Osborne didn’t really think this through, and nobody pointed out to him the massive difference this cap could make to charitable giving.

2. The whole philanthropy agenda is just a bit of a soundbite and it really isn’t that important to the government to push this forward properly at all.

3. Given the high level of national debt and the other wealth-friendly measures contained in the budget, Osborne knew he needed to set out a measure that looked as though it would hit the rich a bit, and he couldn’t think of anything more creative than this.

Whatever has really happened, I think now may be one of those times to listen carefully to huge levels of outcry and consider exempting charitable donations from this tax relief – a campaign calling for which has already been launched by a number of voluntary sector organisations, perhaps showing the seriousness with which they are taking this.

By Sophie Hudson

Charities have good reason to frighten us

The GP and author Margaret McCartney unleashed a no-holds-barred attack on health charities this week in the Times. And I wasn’t entirely convinced by all of her arguments. 

Due to a paywall I can’t link to the article here, but, briefly, a few of her criticisms included the fact that some charities are giving out “alarmist and misleading” information to grab our attention; that too many young women are being used on breast cancer awareness posters; and that charities push “emotive case studies” at journalists.

Basically, according to McCartney: “We are being frightened, not informed.”

The thing is, and to be fair McCartney gives a token mention to sentiments of this kind at the beginning of her piece, we live in a world where charities have to act like this to ever get our attention or, harder still, any donations from us.

We live in a world where any piece of good news is not deemed exciting enough to reach even page 30 of our newspapers. Where we are bombarded by thousands of ads every day, to the point that most of the time we no longer even consciously notice them.

As well as all of this, charities have plenty of competition among themselves, with figures from the Charity Commission website telling us there are over 160,000 registered charities in England and Wales alone.

In these circumstances a charity can’t exactly put an ad up on the tube that says: “There’s only a slight chance that you or your close relatives could get cancer. In fact you’re more likely to get hit by a bus. But why not give us some of your hard-earned cash anyway, just in case?”

I do understand that there are dangers involved in trusted sources of information, like charities, not giving us accurate statistics, or misleading us. But I do not believe for even a moment that the information given by organisations like Breakthrough Breast Cancer is anything like reaching the point of dangerous.

In fact, if we’re going to start going down this route, the Daily Mail should be first on the hit list, not some highly respected, invaluable health charity that is fighting a hard, competitive fight to get us to notice some truly life-saving messages.

And I would personally much rather live in a society where if, god forbid, my best friend, or my mother or my grandmother were in the slightest bit concerned about their health they would go and see their GP right away, rather than in one where they wait because it has been drummed into them that you only have a one in eight chance of getting breast cancer, and that is assuming you reach 85 years old, so don’t you worry too much.

It’s all very well criticising charities for exaggerating the facts slightly, or pointing us to the worst rather than best case scenario, but there really is no alternative in the society we live in. Circumstances cannot just be put aside when you hit out at a organisation for its behaviour – they are often the very reasons for that behaviour.

By Sophie Hudson