Public interest in remuneration in the sector tends to focus on two main topics – the salaries paid to chief executives and senior staff, and whether or not a charity pays its trustees.
Senior staff salaries are generally lower than equivalent salaries in the private and public sectors, and some commentators argue that charities should be able to pay much more in order to attract the best talent. But public opinion still tends to err on the side of caution and there is outcry if a charity is deemed to be spending too much on its chief executive’s salary.
The issue of trustee remuneration is just as emotive – there are strong lobbies within the sector both for keeping trusteeship voluntary and for paying trustees for their efforts. Those who support the latter say payment would help to increase diversity among trustees; those who support the former say it would contravene the very concept of charity. Charities are allowed to pay their board members in certain circumstances but must obtain permission from the Charity Commission.
Interims working in civil society organisations have seen a pay rise of 4 per cent during the last six months, new research by Russam GMS has revealed.
Governance expert Dorothy Dalton has stormed into the debate over whether trustees should sit on unitary boards alongside the executive and be paid for their work.
Is the time right for paid trustees and unitary boards? Money is short. Charities labour to make ends meet. Trustees struggle with the dilemma of cutting core costs or axing frontline services.
If you missed US fundraiser and author Dan Pallotta expound his revolutionary ideas about the future of charities at Charity Finance Live last month, you can now catch him here in a short film by Civil Society’s very own video jockey, Alex Goddard.
The existing model of charity governance that gives non-executive trustee boards authority over executive staff is bust and cannot be sustained, the chair of RNIB told an audience of charity chief executives last week.
This is the full text of RNIB chair Kevin Carey's speech to the Acevo annual conference on Thursday 5 November 2009.
Stephen Bubb has hit out at claims by the trade union Unite that an “excessive City pay culture” exists in the charity sector. The union had said it was concerned that some charity chief executives are earning more than the Prime Minister’s annual salary of £197,000, citing John Belcher, who stepped down from his £391,000 a year role at the Anchor Trust last week.
Charities need to be liberated to enable them to use the tools of commerce if they are to make any dent in the world’s most intractable problems, Dan Pallotta told delegates at Charity Finance Live last month. In his address to the flagship event of Professional Fundraising’s sister magazine Charity Finance, Pallotta set the scene by reciting some depressing figures about the lack of progress made worldwide in the last few years on issues like breast cancer, Aids and malnutrition. “If we want change to occur at the rate of molasses we have a very suitable system for that,” he said.
Professor Paul Palmer has stood down from the independent expert group on expenses in the wake of revelations that he also sits on the board of a for-profit company that has launched a software tool to help charities report their expenses. In his place, the panel has appointed two new members – former chief Charity Commissioner John Stoker and academic Peter Grant.
This article considers the impact of the Charities Act 2006 (the Act) and recently updated Charity Commission guidance on various aspects of trustee remuneration. It also touches briefly on the position in Scotland and Northern Ireland. The underlying legal principlesThree underlying legal principles should inform any discussion of trustee remuneration.
The Affinity Trust, formerly TACT UK, is appointing an independent pay committee to determine how much its board members should be paid, while at the same time applying for charitable status. The Trust, which supports people with learning disabilities in care homes and in the community, used to be an industrial and provident society (IPS), meaning it was exempt from registering with the Charity Commission.
The Charity Commission has appointed interim managers at 35 charities over the last ten years, safeguarding £40.8m of charitable funds at a total cost to the charities involved of more than £1.9m. Figures released to Charity News Alert under the Freedom of Information Act show that there are six interim managers still in place, and the professional fees for the managers involved are not included in the above figure because their tenure has not concluded.
It’s consultation fever in the voluntary sector this summer, with at least six already under way and another expected to launch soon. The consultation on charity leaders’ expenses, sparked by the debate on Charity Finance blogs about whether they should disclose their expenses publicly, launched on 27 July and closes on 30 October.
Charity shops have defied the recession and increased their profits by 4.1 per cent, according to the Charity Shops Survey 2009, which is sponsored by accountants BDO Stoy Hayward. While the gross income of the 69 shop chains in the sample fell by 3.1 per cent to £526.1m, their costs fell even further, by 4.9 per cent to £414.6m, leaving a collective profit of £111.5m. Charity shops have now increased their profits for the past four years, and in eight of the last 11.
Acevo chief executive Stephen Bubb appears to have decided not to publicly disclose his expenses claims but will publish them to Acevo members. In his blog yesterday, Bubb (pictured), who returns from sick leave today, said that the argument that strategic partners of the Office of the Third Sector (OTS) should publish their expenses because they receive some public money, is “false and indeed dangerous”.
The consultation on best practice relating to the disclosure of charity directors’ expenses has launched today as the independent working group running the consultation unveils its online survey. The working group was set up by the NCVO and Charity Finance Directors’ Group after Charity Finance requested they publish the expense claims of their chief executives, as well as those of the Institute of Fundraising, Acevo and NAVCA.
It’s been a tough time for charity finance directors over the last year and the next 12 months show few signs of respite. Against a backdrop of economic recession, charities are suffering from low or no interest on bank deposits, falling yields on investments and downward pressure on funding sources. As income falls, or at least threatens to, cost control is key according to the findings of our inaugural survey of the finance function.
Barnardo's chief executive Martin Narey has revealed that he incurred expenses of £11,229 in 2008 but only claimed back £3,829 Narey was the first sector chief to pledge to disclose his expenses, sparking a widespread debate in the charity sector which in turn prompted NCVO and CFDG to set up an independent expert group to devise guidance on best practice.
The chief executives of NAVCA, Charity Finance Directors' Group and the Institute of Fundraising have now joined the NCVO's Stuart Etherington in providing their total expenses amounts, leaving Acevo as the only major sector umbrella body yet to do so. In 2008-9, NAVCA chief Kevin Curley claimed £9,088, split between £7,403 for travel and £1,685 subsistence, including accommodation, and misc. In 2007-8, he claimed £9351, split between £6,813 for travel and £2538 for subsistence and miscellaneous.
NCVO chief executive Stuart Etherington is planning to recommend to his organisation's audit committee that the expenses of all senior management and trustees be published online. In a response to a blog on Charity Finance this morning by IT consultant John Tate, Etherington said that his average annual expenses totalled £11,000 including all hospitality and overseas travel.
At least two umbrella body chief executives have declined to disclose any more detail of their expense claims beyond what they have already published, preferring to wait and see whether the new independent working group on expenses recommends that they should. This week, RNID chief executive Jackie Ballard (pictured) waded into the debate on publication of charity expenses by saying that simply providing totals without any indication of what the claims were for, was virtually meaningless.
The spoof umbrella chief for umbrellas, Robin Bogg, has told the cybercommunity that he claimed £5,857.04 in expenses last year. His announcement follows the lead of Hubert Carrington at the National Canopy and Visor Organisation (NCVO) and Steve Crikey at Canopy Finance Directors’ Group (CFDG) who disclosed their expense claims at the request of Canopy Finance last week. Bogg did so while vacationing in Ireland to escape the sunny weather and the expenses row.
Former Charity Commissioner Lindsay Driscoll is to chair a new high-powered working group that will develop best practice on how charities should report the expense claims of their senior managers and trustees. The committee has been established by the NCVO and Charity Finance Directors’ Group in response to a debate in the sector about whether charities should publicly disclose their chief executives’ expenses, sparked by Charity Finance’s request for the main membership groups to provide their CEOs’ claim amounts two weeks ago. NCVO, CFDG, NAVCA and the Institute of Fundraising all complied with the request, but Acevo declined, choosing instead to disclose Stephen Bubb’s expenses only to the umbrella group’s members.
The Charities SORP Committee is to discuss the possibility of the next SORP recommending disclosure of charity chief executives' expenses, at its meeting today. The idea was suggested by Paul Palmer, professor of voluntary sector management at Cass Business School and a former member of the SORP Committee, in a response to a blog on Charity Finance last week. The blog by accountant and Charity Finance blogger John Tate, argued that a culture of openness within charities makes abuse of expenses claims much less likely.
Acevo chief executive Stephen Bubb today told a members' summit that he claimed £9,751.04 in expenses last year. His announcement means that all the major umbrella body CEOs have now disclosed their expense claims. Bubb did so on his first day back at work since Charity Finance first requested disclosure. In his speech to the chief executives' summit, he referred to “excitement” in the sector press on expenses and an interesting contest by umbrella body CEOs to publish their expenses: “a kind of ‘you show me yours and I’ll show you mine’ campaign”.
NCVO chief executive Stuart Etherington claimed £11,997 in expenses last year and £10,394 the year before. Etherington was the first of the sector’s four main umbrella body chief executives to respond to Charity Finance’s request for publication of their last two years’ worth of expense claims. Acevo says it is yet to be persuaded of the value of doing so.
Martin Narey, chief executive of Barnardo’s, has pledged that he and his senior management team will publish a full list of their expenses in light of recent relevations about MPs published by the Daily Telegraph. Speaking at the Wavelength conference, Leadership in Tough Times, Narey said "visibility of leadership" was essential.
The Daily Telegraph got it wrong. Charities minister Kevin Brennan didn’t claim £450 on expenses for a 20in widescreen TV for his family home. He had in fact ordered it for his London flat to help him in his MP duties. “I use it mainly to watch the late-night news,” Brennan told the Western Mail. “Just as a TV would be provided in a hotel room or in parliamentary offices to follow events.”
The Scottish Council for Voluntary Organisations (SCVO) is lobbying for third sector providers of public services to get the same wages and conditions as public sector providers.
Mark Adderley has left his role as chief executive of the National Trust for Scotland having been unable to reach agreement on the organisation's forward strategy.