Published On: Fri, Aug 9th, 2013

How much should charity bosses be paid?

Martin-Rowson-07.08.13-013There’s a big fuss going on in the UK right now about CEO pay scales in the big NGOs. With some misgivings, I weighed in with a piece on the Guardian website yesterday. Unfortunately, my weakness for a good one liner was spotted by the sub, who take a throwaway ‘you pay peanuts, you get monkeys’ comment and made it the headline. Wish I hadn’t used the line, but it’s too late now. If I’ve offended any actual interns or volunteers, I apologise. Anyway, here’s the piece, and your chance to vote (right):

It’s impossible for anyone working for an aid charity to comment on the current silly season skirmish on salaries without sounding defensive and/or self-serving. But the alternative – keep your head down until it goes away – leaves the field open to the aid bashers, whether of the crass Godfrey Bloom or more intelligent (and non-racist) persuasion. And bashing aid is what this is about. The critics don’t want value for money; they want less money to be spent on aid. I work for Oxfam and think aid and the work of charities is too important to let them have free rein, so although I realize I am on a hiding to nothing, here goes.

What’s the charge? That our bosses are fat cats, trousering donations that supporters and donor governments fondly think are going to relieve poverty. Cue pics of NGO execs in suits and (horror!) smiling (they clearly don’t care about the poor).

And the defence? As former Oxfam CEO Barbara Stocking pointed out on Radio 4 when the story broke, her successor (and my current boss), Mark Goldring, has a big job by any standards: multitasking between running a 700 shop retail chain, managing 5,000 employees and 20,000 volunteers, a £360m budget and ensuring the safety of staff in some of the riskiest places on earth. It doesn’t always work, as Stocking recalled – for a start, people get killed (on her watch, in Afghanistan).

The defences usually also include lots of management blah about salary reviews and benchmarking, and statements like ‘for every £1 donated to Oxfam, 84p goes directly to emergency, development and campaigning work. Just 9p is spent on running costs.” which I fear no-one reads.

The attacks touch on a pretty profound identity crisis for anyone working in aid. Is it a career or a vocation? People working for charities are not saints, but really pretty normal, mainly middle class types. They have partners, kids, many drive cars. We go on holiday (I know, shocking isn’t it?). We worry about getting old, pensions, all that stuff. There is the odd ascetic Mother Teresa type (I met some fantastic ones while working for CAFOD), but by and large we don’t live in convents/monasteries – which means mortgages.

But it’s also a vocation, something that inspires and excites and makes you feel very lucky (and I accept, maybe in some cases, irritatingly self righteous). We don’t need the Daily Mail to tell us there is a tension there – my son recently berated me for taking a salary from Oxfam (though he didn’t seem to connect this to helping get him through college). So the compromise is that our bosses need salaries, but are prepared to take less than they might otherwise.  Goldring gets paid £120k and earns it (but I would say that, wouldn’t I?). Although it’s a lot of cash, it’s way below what that level of responsibility would earn in the private sector. Barbara Stocking took a 30% salary cut to become a ‘fat cat’ NGO boss, followed by a 5 year pay freeze.

fat catBut whether career or vocation, their work has to be professional – managing these kinds of outfits takes both dedication and skill. Quite rightly, NGOs are under intense pressure to make the most of every penny, and that needs good management. And (the critics don’t talk about this) what would be the alternative to paying this level of salaries? If we ran Oxfam on a volunteer basis, or had a ceiling of say £25,000? If you pay peanuts, you’re pretty likely to get monkeys (albeit well-meaning ones). You don’t have to be a management consultant to suspect that the impact on an organization of such size, complexity and risk could be devastating.

Which would suit the aid critics just fine of course – lots of scandals to justify taking a hatchet to the aid budget (any similarity to what’s going on with the NHS is purely coincidental, I’m sure, even if many of the rock throwers are the same).

So that’s my best shot. Yes we get paid. Yes we have careers. And yes we want to change the world for the better. For an organization like Oxfam, the challenge is to find the right balance between duty (keeping salaries relatively low in the context) and effectiveness (understanding that the external market has an effect on the likely talent you are having to attract/retain from within and, more importantly, from outside the sector). Are the bashers really saying such a balance is impossible?

Over to you – vote now (in a non-binding sort of way). Option 2 is Oxfam’s model, option 4 is MSF UK’s.

By  Duncan Green

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