Good charities are also good businesses – some are better than others

I’m reposting this, following today’s front page story in the Telegraph. Although they are targeting the £100k+ salaries that some charity bosses now apparently receive, they are also suggesting that this could be a sign of the salary creep that is allegedly happening in the public sector.

It should hardly come as a surprise, that if you push the often complex and challenging community support work done by local authorities on to the voluntary sector, their executives are going to expect to be rewarded for managing that increased workload. As I say below, good charities are also good businesses and good businesses know that high quality management doesn’t come on the cheap.

It’s tempting to see this as some sort of three card trick by government, where they encourage charities to take over more and more local authority work, thereby easing the burden on the public purse. In the meantime, these charities are working their socks off to find the extra funding needed to supplement the often inadequate funding that has been passed on by the already inadequately funded local authorities. The confidence tricks comes when you realise that much of the extra money required comes from the same public that has already paid their taxes to government to provide those services!

Personally, unlike some, I’ve never laboured under the illusion that all those who work for charities, do it out of the goodness of their hearts – even where that charity has no national profile.

When it comes to the national charities and their modus operandi, they are, first and foremost businesses, with a business plans, financial projections and performance targets. As such, when they need to recruit somebody into one of their senior management positions, the last thing on their minds is likely to be the social conscience of the individuals applying for the vacant position.

Indeed, having somebody who is more concerned about doing ‘the right thing’ at every step of the way, even if it costs the organisation money, is more likely to find themselves receiving a thank you very much for applying letter, than one offering congratulations.

So, I suppose it shouldn’t be too much of a surprise to see that some of the most popular charities are paying big bucks to their top staff.

That said, it stills seem slightly wrong to see £60,000 plus salaries, potentially being paid out of the pennies and pounds donated via high street collections and charity shop donations, sometimes by those who can least afford it.

To be absolutely fair, at least to those charities that deserve it, the key number for me, is the % of their total income spent of their raison d’être, charity. Those that achieve 70% and above should be acknowledged for achieving figures similar to the overheads costs seen in most successful and efficient businesses.

Those returning figures below 70% and especially below 50%, should be questioned as to their effectiveness and as for the Age UK figures, well…..

Charity

Income Millions

% Spent On Charitable Activity

Number Of Staff Earning Over £60,000

Cancer Research

£493

70

160

Oxfam

£386

76

35

Save the Children

£333

89

31

British Heart Foundation

£250

46

36

Banardo’s

£245

80

35

Royal Mencap Society

£201

96

39

British Red Cross

£200

67

32

Action for Children

£198

93

38

RNLI

£173

78

42

Age UK

£168

49

41

All above figures copied, with thanks, from the article by Richard Dyson – Sunday Telegraph, Money Supplement, 21 July 2013

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