ACEVO has today launched its Good Pay Guide for charities and social enterprises, putting forward a range of recommendations to help maintain public trust in the charity sector.
Announced on the day of CEO Sir Stephen Bubb’s appearance before the Public Administration Select Committee, the Good Pay Guide – which was referred to by Sir Stephen during his evidence – is a practical tool to help charities deliver value for money for donors, staff and beneficiaries.
Key statistics from the Good Pay Guide show that the level of diversity within the charity sector presents a challenge for voluntary organisations to set pay to a one size fits all structure and dismisses the idea of a blanket cap on charity CEO pay.
According to the ACEVO Good Pay Guide:
There are over 163,361 registered charities in the UK, carrying out a vast range of different activities and varying enormously in size and scope. The median chief executive salary is 60,000. This figure falls to £34,600 for charities turning over less than £150,000 a year, but exceeds the £100,000 threshold as charities reach an annual revenue of £25-50 million.
The guide also makes the point that charity pay is more equal than in other sectors. Organisational pay ratios in charities with Chief Executives are typically between 3:1 and 5:1. This contrasts favourably with ratios in other sectors such as universities (national average around 18:1) and local government (national average around 15:1), and very favourably with large corporations like the FTSE 100 (whose average in 2011 was 262:1).
The guide highlights transparency, proportionality, performance, recruitment & retention, and process as the five key principles that charity trustees and remuneration committees must follow to deliver value for money and retain the public trust.
Sir Stephen Bubb, CEO of ACEVO said, “For two decades, ACEVO has taken the lead on bringing transparency to the complex issue of charity Chief Executive pay by each year publishing the ‘ACEVO Pay Survey’. However, as a sector, we know there is always more to do and that is why in my evidence to the Public Administration Select Committee on 17th December 2013 I announced that ACEVO would be launching ‘The ACEVO Good Pay Guide.’ Applying the five principles of Good Pay contained in this guide will help ensure our sector retains the public trust and good-will that their good works have always merited.
Asheem Singh, Director of Public Policy at ACEVO said, “The Good Pay Guide is about giving practical advice to trustees, and indeed to beneficiaries and donors who may be interested in how decisions on charity pay are taken. We’ll continue to argue the case for a modern, professional charity sector that can help as many people as possible, but we also want to ensure that charities on the right track to communicating value for money to their donors, beneficiaries and the wider public. We present the Good Pay Guide as a positive contribution to these welcome debates.”