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How much should charity bosses earn?

There are more than 2,500 staff members at UK charities who earn £100,000+ a year.

How much people should be paid is a much-debated question. A lot of the factors that come to mind - the prestige of the position, its importance to society, how good the worker is at the job, how hard they work - are subjective and therefore difficult to measure. In economics, pay is often talked about via the concept of supply and demand. The idea is that the more in-demand a job is, and the fewer people there are who can supply the necessary labour, the higher the wage will be.

Many people don’t think supply and demand is quite enough, though. They also want wages to reflect societal ideas of fairness and equality. For example, many governments mandate minimum wages because of a belief that workers should earn enough to live on, regardless of how ‘in demand’ they are. (Whether minimum wages are indeed high enough to live on is debated.) At the opposite end of the scale, some people feel uncomfortable about senior execs having big pay packets that far exceed most workers' wages. And this uncomfortableness is particularly strong when the execs in question work in the charity sector.

Charities are set up with the intention of doing some good in the world. People who donate to their cause usually want their money to go towards doing that good thing, not paying large salaries to the staff. And some charity staff salaries are l-a-r-g-e: The Telegraph reports that there are currently over 2,500 UK charity staff  earning more than £100,000 a year. The highest paid of these employees (who works for the Wellcome Trust) earned £4.64 million in 2020. The average UK salary that year was £31,461.

There is a potential justification for paying high wages even in the non-profit sector: competition. Most people want to maximise their earning potential and be paid the same rate for their work as their peers at other organisations. So the worry is that if charity salaries aren’t anywhere near those offered by the private sector then the nonprofit world will struggle to recruit and retain top talent. Paying someone millions might not seem such a big deal if they bring in even more millions due to their fundraising, networking or management skills.

Of course not everyone agrees with this stance. Some might argue that the best person for the top job of a charity is someone who cares enough about the mission to take a below-market salary. After all, there are many people who are motivated by more than just money, including the majority of charity sector workers: only nine percent of nonprofits have any paid staff at all. Those that do offer wages that on average are a third lower than equivalent roles in the private sector.

Read our explainer on: who decides how much we earn


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