Ceo salary

[Miggs]

What does everyone think, re ceo salary, not just Diabetes, but all charities...???

 

[Lucyr]

CEOs have a lot of responsibility and to get a decent one you have to pay a high salary. Think charity CEO pay should be attractive compared to the general market, it’s not a voluntary position.

 

[CliffH]

CEOs have a lot of responsibility and to get a decent one you have to pay a high salary. Think charity CEO pay should be attractive compared to the general market, it’s not a voluntary position.

Having been a trustee of three different charities (and having worked during my career with many others), I've seen what difference a highly skilled and/or charismatic CEO can make - just as in the private and public sectors.

A few days ago several people were saying in this forum that they don't like being pestered for donations by charities - even Diabetes UK. That illustrates how difficult the climate is currently, given that Diabetes UK (like all charities, as far as I'm aware) relies for the vast majority of its income on donations (including legacies).

So, anyone at a senior level in a charity has to be both creative and thick-skinned: people will grumble at being asked to give more money and will also grumble that the charity isn't doing enough. Having a CEO who can keep people motivated is therefore vital.

Assuming that the CEO of Diabetes UK is paid £100-£150k pa, we need to look at the overall size of the business and compare it with what the CEO of an organisation / division / NHS Trust of that size in the private or public sector would be paid. Reducing the salary to (say) £80k because of envy or sour grapes would simply reduce the potential field of talented candidates and risk reducing income by far more pa than the salary saving of c£50k.

 

[Wendal]

Having been a trustee of three different charities (and having worked during my career with many others), I've seen what difference a highly skilled and/or charismatic CEO can make - just as in the private and public sectors.

A few days ago several people were saying in this forum that they don't like being pestered for donations by charities - even Diabetes UK. That illustrates how difficult the climate is currently, given that Diabetes UK (like all charities, as far as I'm aware) relies for the vast majority of its income on donations (including legacies).

So, anyone at a senior level in a charity has to be both creative and thick-skinned: people will grumble at being asked to give more money and will also grumble that the charity isn't doing enough. Having a CEO who can keep people motivated is therefore vital.

Assuming that the CEO of Diabetes UK is paid £100-£150k pa, we need to look at the overall size of the business and compare it with what the CEO of an organisation / division / NHS Trust of that size in the private or public sector would be paid. Reducing the salary to (say) £80k because of envy or sour grapes would simply reduce the potential field of talented candidates and risk reducing income by far more pa than the salary saving of c£50k.

Hi Cliff,
Post recommended and you make some very salient points.I was one of the ones who commented about charitable donations.
I do appreciate how difficult it is to get the balance right between the need to “commercialise giving” to maximise revenue and simply allowing charities to step back( not really an option) and await for the public to come to them.
There is a tendency for charities to want to complete subscriptions which again from a revenue viewpoint I can totally understand whereas I prefer to give a one off donation and that option does not seem available when you come across many of these organisations out and about.

 

[CliffH]

Hi Cliff,
Post recommended and you make some very salient points.I was one of the ones who commented about charitable donations.
I do appreciate how difficult it is to get the balance right between the need to “commercialise giving” to maximise revenue and simply allowing charities to step back( not really an option) and await for the public to come to them.
There is a tendency for charities to want to complete subscriptions which again from a revenue viewpoint I can totally understand whereas I prefer to give a one off donation and that option does not seem available when you come across many of these organisations out and about.

I'm sure there are people on this forum with much more expertise than me at fundraising. However, I remember years ago being told by the Financial Director of a big charity that they had to recognise where their big donations came from and how to maximise such income by avoiding wasting time and effort on initiatives that raised little - or even cost them money.

In that charity's case (it was one of the biggest 'animal' charities), apparently legacies was by far their biggest source of income. As the FD told me, there was no way of knowing which of the many elderly people they came across would turn out to be millionaires who'd leave a substantial legacy to the charity. So, their staff were trained to treat all elderly people as if they were millionaires! The 'traditional' fundraisers such as collection boxes outside supermarkets tended to cost the charity money - but were sometimes useful things to do purely as publicity.

Perhaps, then, nowadays charities have realised that getting someone to sign up to regular giving keeps the charity in that person's mind and therefore increases the chance of a legacy. I guess that a few people simply putting a pound into a collection tin as a one-off though barely covers the cost of having the person standing there. As I said in my earlier post, senior people in charities have to be thick-skinned: they're not going to last long if they're embarassed about asking people for money! I guess that removing the option of just putting money in a tin is worth it if it gets a few more people signed up for regular giving.

In my own small attempts at fundraising, I had to learn similar lessons quickly - and to value my time and that of other people involved in raising funds. So, the CEO of a charity probably has to be even more creative than the CEO of a private or public sector organisation of a similar size. In fact, perhaps it would be appropriate to interpret the original question as, "Should CEOs of charities be paid significantly more than currently?".

 

[Burylancs]

What does everyone think, re ceo salary, not just Diabetes, but all charities...???

There used to be an assessment of charities that stated that if a Charity spent more than 50% of its income on running itself ( including wages) then it could be classed as a 'failing Charity'. That description of Charities wanted 75% of the income spent on the Charity's charitable aims. It's not a problem for moneybags like Diabetes UK but could be an issue for smaller charities like JDRF and IDDT ( if it's still going).
The Guardian maintains a list of charity CEO salaries online. Diabetes UK CEO gets £75,000 compared to Cancer Research UK £140,000.

 

[CliffH]

There used to be an assessment of charities that stated that if a Charity spent more than 50% of its income on running itself ( including wages) then it could be classed as a 'failing Charity'. That description of Charities wanted 75% of the income spent on the Charity's charitable aims. It's not a problem for moneybags like Diabetes UK but could be an issue for smaller charities like JDRF and IDDT ( if it's still going).
The Guardian maintains a list of charity CEO salaries online. Diabetes UK CEO gets £75,000 compared to Cancer Research UK £140,000.

My experience is rather out of date (I haven't been a trustee of any charities for more than ten years now) but I remember the concept of 'proportionality'. One of the charities of which I was a trustee was tiny and the rules (including level of reserves that we were expected to hold) that the Charity Commission held us to weren't identical to those imposed on the much bigger charities of which I was a trustee.

In fact, with all three charities of which I was a trustee I remember that the issue of reserves (including what level of reserves was appropriate and what it might or might not be appropriate to spend some reserves on - including pay increases) was one of the things that caused the biggest discussions amongst board members. For example, there's a balance between wanting to have enough reserves to (as a minimum) be able to cover salaries for at least three months and not having such a high level of reserves that it looks in funding applications as if the charity doesn't need any more money.

From a quick skim of the Diabetes UK Annual Report, if the CEO's only getting £75k (which seems rather low) then some other employees are getting significantly more. I may have misread it though.

 

[Wendal]

Nice discussion and yes that seems very low for a CEO salary as you do need to attract talented and creative folk.As I said Cliff I can fully understand why a regular subscription to a charity is much more cost effective than a bucket collection.
I just find it frustrating that when I am approached for a subscription I can’t just put a one off donation into a tin ( maybe it is an agency thing).If you look at things like the poppy appeal you can donate as well as say sign up.
I have knowledge of on line sign ups for subscriptions which works well and have contact with both local and national Animal Charities so understand the legacy aspect.
Would expect the charities to understand their business model and tailor their fund raising efforts to optimise it and it maybe that people like myself just fail to understand why they do certain things.

 

[Burylancs]

My experience is rather out of date (I haven't been a trustee of any charities for more than ten years now) but I remember the concept of 'proportionality'. One of the charities of which I was a trustee was tiny and the rules (including level of reserves that we were expected to hold) that the Charity Commission held us to weren't identical to those imposed on the much bigger charities of which I was a trustee.

In fact, with all three charities of which I was a trustee I remember that the issue of reserves (including what level of reserves was appropriate and what it might or might not be appropriate to spend some reserves on - including pay increases) was one of the things that caused the biggest discussions amongst board members. For example, there's a balance between wanting to have enough reserves to (as a minimum) be able to cover salaries for at least three months and not having such a high level of reserves that it looks in funding applications as if the charity doesn't need any more money.

From a quick skim of the Diabetes UK Annual Report, if the CEO's only getting £75k (which seems rather low) then some other employees are getting significantly more. I may have misread it though.

The £75,000 could be some years old. A new CEO, Colette Marshall, was appointed late last year. There will also be perks of course.

 

[CliffH]

The £75,000 could be some years old. A new CEO, Colette Marshall, was appointed late last year. There will also be perks of course.

What perks will there be? Is there a defined-benefits pension, for example? I'm not sure that whatever "perks" a CEO of a charity gets would be comparable with those that the CEO of a private or public sector organisation of similar size would get.