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President of NCVO says payment of trustees is inevitable
Payment of trustees is coming whether we like it or not, according to president of NCVO, Lord Hodgson of Astley Abbott.
Speaking yesterday on a panel debate at the Charity Commission annual public meeting, Lord Hodgson (pictured) responded to concerns from the audience that a new lighter-touch Charity Commission would put more pressure on trustees and lead to calls for remuneration.
The whole panel, which included Tory peer Lord Hodgson, Labour peer Lord Smith of Finsbury, and Liberal Democrat peer Baroness Tyler of Enfield, all agreed some form of trustee payment could be necessary in the future.
Lord Hodgson said: "I believe it’s going to come.
“We have situations where the chief executive's pay is £150,000 and trustees are thinking ‘I supervise him for nothing’. It is an issue of risk and reward,” he said.
He added that the Red Tape Taskforce, a group he chaired which looked at reducing bureaucracy in the charity sector, had asked stakeholders about relaxing rules on paying trustees and found a 50/50 split in opinion:
“So we didn’t make the recommendation,” he said. “We ran away from it. But I do believe it’s coming whether we like it or not. And we’ll need to make sure it’s declared and transparent.”
Baroness Tyler of Enfield, chief executive of Relate, was more tempered in her view, but did say that expecting people to give more time and expertise for free in the future could hinder inclusivity:
“If it’s only people with time and money who can volunteer as trustees without recompense, then we won’t have a diverse trustee board. Maybe we will need honorarium payments in the future.”
And Lord Smith of Finsbury said it would need to be handled with care, but “it might have to come”.
He added: "It's not right or necessary to pay trustees of small, community charities, but it is probably now needed for large ones."
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Suresh Lalvani
Consultant
1 Oct 2011
Trustees serve on the board as volunteers. Therefore if Trustees are to be paid, by the same token other volunteers should be paid.
Catherine Clark
Head of Communications, Marketing & Development
Royal School of Church Music
29 Sep 2011
Mass. AG Calls for Oversight of Charity Board Pay
September 28, 2011, 12:16 pm
In a Massachusetts legislative hearing Tuesday, Attorney General Martha Coakley called on lawmakers to back a measure that would bar nonprofit organizations from paying their board members unless they win state approval, the Boston Herald and the Associated Press write.
The House bill would require charities to seek approval from the attorney general’s office if they want to pay board members.
“Unjustifiable compensation of charitable board directors creates inherent conflicts of interest,” Ms. Coakley testified. “It involves an unavoidable conflict between board members’ personal financial interests and their obligation to safeguard the organization.”
The effort to curb salaries for charity board members originated in a controversy over stipends for directors at the state’s nonprofit health insurers. Lawmakers rejected similar legislation this summer when it was attached to the state budget bill, but the current proposal is a stand-alone measure.
From The Chronicle: Of the 50 biggest foundations, 38 pay their trustees, according to our analysis of informational tax returns.
Joe
Driver of Ideas
Saxton
27 Sep 2011
Am I the only one who thinks its pretty hypocritical for people who have paid jobs at charities to condemn the creation of paid trustees. Why is it so outrageous for trustees to be paid but its OK for CEOs to be paid - Deborah. My own view is that each charity should be able to decide for itself who is and isn't paid as they know their organisation the best.
Peter Davies
Corporate Services Director
Walsingham
30 Sep 2011
Response to [Joe ]
Are those of us who have paid jobs at charities and are also (voluntary) trustees elsewhere allowed to oppose the creation of paid trustees?
Stephen Lulsley
Independent Commentator and Consultant
29 Sep 2011
Response to [Joe ]
Joe Saxton's statement is absurd. Who would appoint these paid trustees? To whom would they would be accountable? What would differentiate them from the staff team? How would they relate?
Carl Allen
28 Sep 2011
Response to [Joe ]
They volunteered not to be paid.
And why ask for money when there are others who can fill the gap and accept the principle of non-payment.
Karl Wilding
Head of Policy, Research & Foresight
NCVO
26 Sep 2011
I've been asking around for some actual evidence in relation to this issue and the result is pretty sparse (there's more on my NCVO blog). There is one US study however that is methodologically robust. In a context whereby payment of trustees is rare, it found:
- compensation was not associated with achieving
greater racial or ethnic diversity
- no indication that compensating
trustees promotes higher levels of board engagement
- compensation was positively associated with attendance at board meetings
In other words, paying trustees makes them turn up to meetings.
Carl Allen
26 Sep 2011
Response to [Karl Wilding]
Occasionally I am asked to clarify how far an organisationally should go to make it possible for trustees to incur no expense for being a trustee ... what I recommend is of course dependent on the organisation's finances.
A list of recommendations I made up for Community Empowerment Networks included ... loan of a computer and printer, internet connections and paper, childcare provision, travel and attendance allowance.
On a point of practice, only unemployed or low paid trustees were actually paid the atendance allowance automatically with other trustees being emphatic that their fellow members be paid as of right and not by claiming. The amount of the attendance allowance precluded it from being considered attractive as a return on time and effort expended.
And that I think is as far one should go as compensation is for volunteering and not on a reciprocal basis or comparative basis with other sectors.
Peaches Golding
Owner Manager
Peaches Golding Marketing & Communications
26 Sep 2011
All praise to Lord Hodgson for tackling such an explosive issue head on. Yes, some remuneration for Trustees is essential in order to foster diversity.
There are plenty of good brains that could add value to the charity sector but just don't have the capacity to do so. In some cases, a small honorarium provides enough assistance to unlock that capacity.
Brains have no colour, no religion, no socio-economic classification. Especially in these challenging and turbulent times, charities need access to all brains in order to provide leadership, improve services and provide vital governance. Let's not quibble over paying Trustees when there are more important issues for the sector.
Carl Allen
26 Sep 2011
Response to [Peaches Golding]
Then a small honorarium becomes recognition of financial need in a trustee (and not necesarily reciprocity or diversity unless the board has need for a trustee that is currently experiencing financial need).
The downside is that such trustees may not feel independent in decision making.
Debra Allcock Tyler
CEO
Directory of Social Change
26 Sep 2011
Don't worry colleagues. He's not only misguided - but also badly wrong. It isn't inevitable and the vast majority of current or future trustees will or already do understand that. And I can reassure you that many trustees of larger charities, as well as small ones, do understand their responsibility to the public and their beneficiaries and are equally vehemently against getting paid. And for that small handful who are currently paid...shame on you.
Ben Wittenberg
DSC
26 Sep 2011
Agree with the posts above - outrageous and ridiculous in the extreme. But even setting the moral arguments aside, who is going to set their salaries? Or fire them if they aren't performing? Or decide if they get a pay rise?
Nigel Edward-Few
CEO
Jubilee Action
26 Sep 2011
Response to [Ben Wittenberg]
Quite!
Or would that,(to refer to another discussion going on at present), fall to the new compulsorily joined to umbrella bodies that Dame Suzi Leather is proposing?
Socrates Socratous
Director
SOC VAT Consultants
24 Sep 2011
Before moving down this road, full consideration should also be given to the potential impact for VAT purposes,particularly in the cultural sector where many charities are able to exempt admission fees on the basis that they are 'managed and administered on a voluntary basis'. Payments to the Trustees would remove entitlement to exemption resulting in higher admission fees or less income for the charity
Dawn Varley
Consultant
Purple Vision
24 Sep 2011
I am vehemently opposed to the paying of Trustees (and I am one, and an ex-one). The whole premise of being a Trustee is that you give your time and expertise (ideally alongside your money - I'm a fundraiser) on the clear understanding that this is voluntary, and no renumeration is expected.
Two things I find quite offensive about this story, and they are firstly, that it is implied someone being paid to do a job will therefore do it more diligently. I'm sure we can all think of example where that this has clearly not been the case. I for one value my time, and if I give it to you, I expect both of us to use it wisely. If Lord Hodgson really thinks that Trustees are thinking 'the CEO gets paid £xxx,xxx and I get nothing' then I don't know which misguided people he's speaking too, but they clearly didn't understand trusteeship when they signed up.
Secondly, the comment by Lord Smith of Finsbury 'It's not right or necessary to pay trustees of small, community charities, but it is probably now needed for large ones' is somewhat offensive to the vast majority of charities that are just that - small. They do not suffer any the less from the challenges of funding cuts, resourcing issues, internal politics, the need for expert skills etc...
I suspect a lot of people within the NCVO will be upset by these comments, as will a lot of NCVO members. Maybe the Lords themselves should just get out more?
Carl Allen
23 Sep 2011
1. The opening up of public services to delivery by charities is accompanied by an easing of restrictions on payments to trustees
2. Using academies as an circular example: governors will be paid as a norm and of course the bigger the governors pay the bigger the executive pay ... a non-virtuous circle with private sector benchmarking to come.
TOP TIP Try to become a school governor and not a councillor.
3. Public regulatory mechanisms such as the Freedom of Information act, Public Information Disclosure act (whistleblowing) and the Equality Act will not be relevant on many matters where they once were in the delivery of public services.
Sharon Shortland
23 Sep 2011
That is OK for all those charities that are also businesses but what about the 44% of charities with income under £10,0000 who do not pay anyone.
As with many organisations, committeees or quorum, the many are judged by what happens with the few.
Nigel Edward-Few
CEO
23 Sep 2011
Response to [Sharon Shortland]
Here we go again, everything revolving around the big boys.
Lord Hodgson said: "I believe it’s going to come. “We have situations where the chief executive's pay is £150,000 and trustees are thinking ‘I supervise him for nothing’. It is an issue of risk and reward,” he said.
All I can say to Lord Hodgson is, "What about the vast majority of charities where the CEO get's a quarter or less of his £150k figure, often nothing?"
As for the idea that all trustees are only those with time or money ... codswallop!
As well as being a charity CEO, I am a trustee of another charity and chair of trustees of a third. I have neither time nor money but give of both absolutely free and often at my own cost for many hours a week.
I believe that once upon a time, MPs weren't paid. Now they are, handsomely with handsome benefits (although not all have been legitimately gained it seems!). What have we got? A discredited House where many MPs are on the gravy train, MEPs even more so.
Is this what we want for our sector? If it is inevitable that trustees are to be paid, then it is equally inevitable that we will end up with many in it for what they can get out of it. Whatever happened to service without expectation?
Carl Allen
24 Sep 2011
Response to [Nigel Edward-Few]
"Whatever happened to service without expectation?"
Formally died when the national compact volunteering code was being revised re use of the term "reciprocal".
John Marshall
CEO
Centrepoint Outreach
23 Sep 2011
Outside of my day job - I work as a volunteer with several organisations. I give my time and skills freely. If you are paid - you cease to be a volunteer. Have we really reached the stage where people will only take on responsibility or give their time to help others for payment?
I would not support any charity where trustees are paid and would view it as a misuse of funds. That is not what people give to charity for! We would all lose members and supporters. When asked to donate to large national charities - I suggest to canvasers that they check their website to see how much they need to raise for senior staff salaries, perks and pensions - before any money is spent on delivery! Charity is about addressing need - not greed!
Andrew McCulloch
CEO
The Mental Health Foundation
23 Sep 2011
What nonsense, what we should be doing is promoting the concept of volunteering and dare I say it, charity.
Carl Allen
23 Sep 2011
Response to [Andrew McCulloch]
Like volunteering, charity is becoming a reciprocal matter.
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Gordon Hughes
Chair, Trustee, Volunteer
Several charities of different sizes
4 Oct 2011
No Lord Smith. It is the small, local charities which are crucial to the communities they serve but which struggle the hardest to get Trustees.
The national charities, one of which I Chair, have (I hope) top flight CEOs to advise Trustees and have no need to buy in experts.
Local charities, also one of which I Chair, look to attract specific skills in their Trustees. But all charities need Trustees who are committed to their Charity first and their bank balance last because it is a vocation not a job. That's what it means to be a Trustee. No one knows who you are but they know your Charity. Or should.
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