Charity CEO salaries: a call for balance, transparency, and competitive compensation

Charity sector pay has once more been in the headlines, with the Charity Commission’s chief executive being drawn to comment on a report that high pay in the sector was increasing (Surge in charity bosses on super-sized salaries)

The report found that 44 people in the sector (out of an estimated workforce of 975,000 – equivalent to 0.00005% of the total workforce) were paid over £400,000. These people worked in 14 organisations (out of approximately 166,000 voluntary organisations in the UK) – an incredibly small minority that can both justify and afford pay of that level.

David Holdsworth, the Charity Commission's chief executive, emphasised the need for a balance between attracting talented leaders and maintaining the selflessness that defines charitable work. He stated, "Large and complex charities must attract talented people to run them, but the public rightly expects the demands of executive jobs in charities to be balanced with the selflessness that underpins what it means to be charitable"

While the level of pay in the report is unattainable for almost all charities – charity CEO pay is still, on average, £60,000 according to the most recent ACEVO salary survey – the question of pay for senior leaders in the sector is one that always generates significant interest among the press, political commentators and donors, so it is something that all charities should be monitoring carefully.

Why competitive salaries matter

These super-sized charities are operating in an environment where they are competing with the corporate sector for talent with the skills in leading and managing organisations of an equivalent size and complexity – however, there is a need for these organisations to ensure that executive compensation does not undermine public trust and the core values of the charity sector.  Achieving this balance is challenging, but offering fair compensation and maintaining transparency is key.  

For other charities, determining a fair and competitive salary is a complex process. However, it is a key task - skilled leaders bring strategic vision, financial acumen, and operational expertise that can significantly enhance a charity's effectiveness and sustainability. By offering fair compensation, charities can ensure they have the leadership needed to achieve their mission and deliver impactful programmes.

Benchmarking salaries

In a follow up article on the Civil Society website, it was quoted that

“On its criteria for intervening over pay, the commission has repeatedly said it is “not a pay regulator” but expects charities to undertake benchmarking exercises to set appropriate salaries for senior positions, using its guidance about decision-making.”

Trustees play a crucial role in this process. They have independent control over, and legal responsibility for, a charity’s management and administration, they must ensure that executive compensation is reasonable and not excessive, balancing the need to attract top talent with the charity’s financial constraints and ethical responsibilities. By conducting thorough and well-documented reviews of executive pay, trustees can justify their decisions and maintain public trust.  

How TPP can help

With longstanding expertise in the charity sector, TPP have long been able to offer bespoke benchmarking services to charities across the UK – full details of how we work can be found here. Our research-based process offers insight that helps you to ensure that your organisation is paying the right salary and gives you the confidence in knowing that you are striking the right balance between fair compensation and maintaining the integrity of the charity sector.

Please don’t hesitate to complete the contact form on the webpage or get in touch with either Matt Adams or Lisa Ross via executive@tpp.co.uk / 0207 198 6060 for any further information.