I have spent the last few weeks at various Christian festivals but it seems that outside the main gates of the field there has been lots of excitement about how much the leaders of some charities get paid. You can catch up here. Tearfund’s CEO (who isn’t one of the best paid) makes a personal response here.
The thing about all of this that has got me thinking is not so much the absolute levels of pay but on what basis people in the charity sector should be paid. It is tricky because charities exist to enable donors to effectively serve beneficiaries. They started largely out of rich people’s desire to contribute to others and those rich people didn’t need to earn money. Fast forward to today and charities come in all shapes and sizes and do an amazing array of complicated things. Many of them run large retail or catering operations (National Trust cafe’s and charity clothing shops). They handle millions of pounds and do everything from delivering complex services to making grants across the world. The truth is that you cannot do all of these things simply with great volunteers contributing a few hours per week. You need professional charity workers and, like in any organisation, some of them need to be very highly skilled.
So, how should charity workers be paid?
I have lived through several pay reviews in several organisations and a common feature is that they appeal to some objective scientific method for setting pay. This seems to me always to be nonsense. There is no science involved beyond gathering information about how other similar people are paid in different organisations. It all comes down to a set of value judgements that organisations make about pay. Here are a few:
1. The market sets the level of pay. This is the common approach but is the one that has caused the recent controversy. There is a market for fundraisers (or receptionists or CEO’s) and you pay what the market says those roles get paid. This is simple and straightforward. Unfortunately the market isn’t always great at assigning value. No one really thinks that a mediocre business manager is worth more than a highly skilled intensive care nurse and yet the market decides that the former is better rewarded. We have a situation where there is a market in senior executives of big charities and that market sets a value. But it is this value that is causing concern. Interestingly the most concerned are those right-wing commentators who usually worship the market. It makes you wonder whether there is another agenda. Interestingly when Tearfund last did some research our more entry-level, practical and lower paid roles were pretty much paid at the market rate in the area for those roles in any organisation or business. It was the more senior roles that were badly paid in comparison with the market.
2. Everyone is paid the same. At the other end of the spectrum is the idea that everyone’s contribution is equally valuable and should be recognised by being paid the same. I worked for an organisation that did this and it enabled people to move around roles, try new things, help other teams out all without worrying about what this meant for my salary. Incentive came from training opportunities, broader experience and a commitment to the work rather than greater pay. There were issues about retaining senior staff and we did have the best paid crèche workers in London but in the main it worked well. The biggest drawback was that it was expensive. Equal pay cannot mean low pay but has to take into account housing and transport costs if it is going to work.
3. People are paid on the basis of need. Some people advocate payment on the basis of need. I once worked for an organisation that did this to a large degree. And in truth it was a mess! While it seems a simple idea it is full of complexity. Can a married couple live as cheaply as a single person? What is enough and who decides on the figure? Is it fair to receive less money because you don’t have children than if you do? And so on. This was the approach that caused the most angst and seemed the least satisfactory.