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Why do charities have paid staff?

This is one of seven fact sheets in a series about reporting on charity issues. It provides context for accurate reporting and details of where to get more information.

Other topics in the series are:

  1. How can I tell how effective a charity is?
  2. How much money goes on running costs?
  3. Why do charities fundraise?
  4. Why do charities deliver public services?
  5. Why do charities campaign?
  6. Are there too many charities?

Download this fact sheet as a PDF (60KB)

Why pay staff at all? Can’t volunteers do the work?

The vast majority of all charities rely entirely upon the work of volunteers and do not employ any staff at all: it is estimated that only 9% of charities employ paid staff, while 91% are solely reliant on volunteers[1].

However, like the private and public sectors, some charities will need paid staff – either due to the complexity of the work and the training and experience needed to deliver it, or the scale of the issue they are dealing with.

And while volunteering is popular in the UK with 21 million people volunteering at least once a year[2], not everyone can afford to work for free. The vast majority need to earn a living, restricting their time to volunteer and restricting the resource a charity has to deliver its services.

Part of effective trusteeship is weighing up where resource should be spent on employing staff or recruiting and training volunteers.

Senior salaries

Some charities need experienced staff to operate effectively. Many UK charities employ thousands of people and manage large budgets. Highly skilled and experienced managers who will spend hard-earned donations wisely are essential.

Charities are legally required to publish the number of staff they employ that earn over £60,000 in their annual report (broken down into £10,000 pay bands). Many go further and publish detailed information on their websites.

In addition, charity chief executives are accountable to an independent board of volunteers, who will decide what is fair based on skills, experience, and performance in the job.

Fewer than 1% of UK charities in 2011 were estimated to have employed a member of staff earning £60,000 or more[3].

Many chief executives earn far less working for a charity that they would in equivalent roles in the private or public sector. Senior staff in charities tend to earn substantially less than their counterparts in equivalently sized private or public organisations, with a ‘charity discount’ of 25-45% at senior levels[4].

It is vitally important charities are able to explain their pay and expenses policy in a very clear and transparent way.

The advice from an inquiry led by NCVO suggests that where trustees feel high salaries are necessary to attract the right people, they should explain their rationale openly. The advice also includes publishing the ratio of the highest salary to the median salary across the organisation.

Useful press contacts

National Council for Voluntary Organisations (NCVO)

  • This email address is being protected from spambots. You need JavaScript enabled to view it.
  • Telephone 020 7520 2413
  • Out of hours 07714 243 942
  • @NCVO

Charity Finance Group

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  • Telephone 020 7871 5477
  • Out of hours 07889 129 971
  • @CFGtweets

 

1 Report of the Inquiry into Charity Senior Executive Pay, NCVO, April 2014

2 Community life survey 2015/16 

3 Report of the Inquiry into Charity Senior Executive Pay, NCVO, April 2014, 

4 Ibid

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