Despite the majority of charity executives earning modest salaries, reported cases of excessive charity CEO salaries have created the narrative that charity executives are overpaid and that this diverts funds from the causes charities set out to help.
Pay for chief executives will vary but, according to the Pay and Equalities Survey of the Association of Chief Executives of Voluntary Organisations (ACEVO), the median basic salary for charity CEOs in the UK was £56,000 in 2022 (compared to £60,000 when the survey first began in 2013).
Much higher median salaries of £175,000 have been reported for CEOs of the UK’s largest 100 charities, according to the Charity Chief Executives Survey 2023. This figure might seem high, and in some cases it is high, but the highest earners generally run the largest and most complex charities where the income levels are hundreds of millions of pounds. Charities need to strike a balance in their remuneration policy, offering salaries that can attract executives with the skills and experience needed to lead the organisation, while not alienating supporters or diverting funds from the mission.
What is often overlooked when CEO salaries come under scrutiny is how broad and demanding their roles can be. Some charities are as complex, if not more so, as corporate organisations.
CEOs provide leadership by working with the board to develop and implement the charity’s strategy and play a critical role in engaging staff, volunteers and prospective donors. They have delegated responsibility for the organisation’s administration and finances, which can include managing complex trading activities, contracts and grants. As the charity’s public face, CEOs may also promote the charity’s interests by advocating change and building relationships with stakeholders in politics and the media.
They do this while operating in a highly regulated environment where they must meet the requirements of the Charity Commission, the Fundraising Regulator, HMRC, the Information Commissioner’s Office, and other regulators such as the Care Quality Commission in the health service, or Ofsted in the education sector.
Charities can ensure that executive pay is proportionate by benchmarking remuneration against similar roles in organisations that are comparable in size, sector and location.
Disclosures relating to remuneration and other benefits including expenses paid to trustees and the senior management team are required by charity accounting and reporting rules. Charities should therefore aim to explain their remuneration policies and senior management pay in the context of the executives’ responsibilities to maintain public confidence in their work.
Context is important, so charities should highlight how the senior management team have contributed to the positive impact of their work. Charities may also choose to communicate their commitment to paying all employees a fair wage, for example, if they are accredited by the Living Wage Foundation.
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