Charity salaries: how do we value sector staff?

Elliot Bidgood writes about charity salaries in 2021, and how to balance the needs of a vital workforce with the financial and reputational constraints of the sector

This month Third Sector magazine published their bi-annual look at the highest charity salaries paid by the 100 biggest UK charities. They found more top earners £200k+ than in previous years, and some issues around transparency.

This said, Third Sector were also at pains to note that these top 100 contain many bodies (e.g. private hospitals, philanthropic foundations and educational establishments) that are not reflective of flagship public-facing charity ‘brands’, let alone smaller charities. Further, they noted executive pay in the private sector is higher than those helming even these large, unrepresentative charities. Registered charities must report how many staff earn more than £60k, but Charity Commission data suggests only 3.2% of 170,000 organisations meet this threshold at all. Acevo found that even the median salary for a charity chief executive was below this line, at £55,993.

At our regular EP Foundation information events for career changers, charity salaries and expected pay is always a hot topic. Crucially, we poll our guests about their expectations after showing them recent data. In one group, 47% expected wages to be even lower than they were. None thought they would be higher. A private sector swapper we profiled also commented that pay was their biggest challenge in their new walk of life - “I’m paid well for the work I do, but I’ve taken a significant pay cut…It seems unfair that doing something with more purpose means you have to sacrifice the overall pay and benefits”.

Audience reactions about charity salaries at a recent EP Foundation event for career changers. Sign up for our next event on July 1st - ‘a recruiter’s perspective’

Not-for-profit organisations face an eternal conflict. Adequate charity salaries are crucial if they are to compete for skilled staff, retain them and ensure they continue to perform well. No reasonably-sized organisation can meet their social objectives unless the team behind it are at their best. Charity staff also report doing a lot of unpaid overtime during (and even before) the pandemic, driven by a mix of necessity and devotion to the cause. But a structural reliance on not fairly compensating staff means the sector is not living up to its values in other ways. But at the very same time, many charities face both practical financial constraints – worsened by COVID - and the weight of public expectations about pay. Notably, Third Sector’s research suggested fundraising-oriented charities exercised more pay restraint.

So, what can the sector do to compete and find a balance?

First, it can defend itself from misconceptions and press attacks. Volunteerism is a big part of the sector ethos (and something we will honour in June for Volunteers’ Week), but lines must be drawn. Contracted staff are professionals and musn't run vital organisations for a pittance. Even when they are paid well by charity standards, they are still often earning less than their skillset could get them elsewhere. What’s more, there is widespread talk about ensuring essential workers are paid properly as we come out of the pandemic. As organisations look at income diversification and post-COVID strategies, they could ensure that their financial plans allocate a share of target growth to topping up salaries. This will reward staff and make the rhetoric a reality.

Second, as well as explaining compensation better externally, charities must do so within. Charity employers should continue the momentum towards fair benchmarking. Many have signed up to Show the Salary, but more should do so, and they must make sure compensation strategies are explained internally. This provides employees a healthier structure and a space to raise any questions. Transparency and rigorous comparison are also central to combatting gender pay discrepancies, where social organisations must lead by comparison.

And finally, charities can live up to the hype on flexible work. This again could enable women to advance in the workplace without being encumbered by care responsibilities. It is also part of the package organisations must offer when they can’t compete like-for-like on financial reward. Zoe Young from the ‘Work After Lockdown’ project noted that 73% of employees wanted hybrid working. (She added this can be thought of in both time and spatial terms - how work spreads across days, weeks, months and the year, not just the blend of home and office). However, Timewise found the share of jobs offering flexibility at point of hire only increased slightly in 2020 (from 17% to 22%). This is a golden opportunity for social organisations to offer something other workplaces are still not, if they are willing to seize it.

Elliot Bidgood works as communications manager for the Eastside Primetimers Foundation.