20 charity bosses are earning over $1 million per year

According to CharityWatch, 20 charity bosses have salaries over $1 million per year. These include the bosses of American Heart Association, Wildlife Conservation Society and International Rescue Committee.

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Anita Chan
Potential
February 27, 2021 6:00 pm

One main reason why there is public anger against charity bosses earning so much is because of waste. When a donor gives money to a charity, they want as much of it as possible to go to the people or cause they are supporting. A charity boss earning over $1 million feels like a waste of donation money. As shown in the CharityWatch list, some charities also offer bonuses and incentives similar to the largest tech and banking organizations. There is a general feeling that charity bosses should get paid less. Not because they are less capable, but because it’s the charity sector!

Waste of resources is among the least tolerated aspects of a charity and likely to cause a lot of public anger when exposed. But just like other large organizations, waste is everywhere. Not necessarily in expenditure of items, but in everyday behavior. I worked for a large charity I won’t name. When I first started I was starry-eyed, ready to take on the world and help the less fortunate. Instead of collaboration, supporting each other and encouragement, I witness company politics, undermining staff and sabotaging projects. I couldn’t believe it. Now I’m a little less naïve.

The point is that charities should be doing all they can to reduce waste, and paying bosses $2 million or $3 million annual salary is difficult to justify. Personally, I understand the difficult position charities are in. They need talented executives but also have to assuage public sentiment. My pet peeve is seeing charity ads on Facebook. It’s frustrating to think that my donation money to a charity is being spent on Facebook ads to get more donation money. It reminds me of a pyramid scheme or MLM scheme 🤣🤣🙈🙈

But this is the sceptical and critical side of me. Charities who use ads on social media will have done the math. Spend a little to get a little, as the phrase goes. If some of my donation money is going toward ads that bring in more money for the charity, then it’s helping the wider cause. The analogy is the same for a charity CEO. If they are delivering in their capacity as boss, maybe they deserve high compensation. Perhaps reducing pay will lead to a less capable person in charge, and ultimately less money donated to the charity.

Devin Graff
Influence
February 25, 2021 11:29 pm

Some element of this feels wrong. It feels wasteful and unnecessary for charity bosses to be taking home that much salary when they are supposed to helping some of the poorest, needy and vulnerable in society.

But the reality is that strong leadership is required to keep the charity engine going. Running a large organization is a massive undertaking in itself, and specifically running a charity requires a special skillset. Compensation has to be large enough to attract the best candidates. Another way to look at it is if they were working in other sectors in a similar position, they would likely be earning a lot more. So they are already taking a hit in that sense.

Charities are also required to be transparent, outlining where each cent of a donation is going. Below is a breakdown of where the International Rescue Committee’s donations go. 87 cents of every dollar go to those in need, with 5 cents per dollar going to fundraising and 8 cents per dollar going to administration. Given the pressure on charities to use donor money as efficiently as possible, charities benchmark against each other to have high proportions of donations going to those in need.

So although a million dollar pay packet for a charity boss sounds unnecessary, it is needed to ensure proper management. Also if the dollar breakdown of a donation has a high proportion going to those in need, then it’s easier to justify such a high salary.

Rescue.jpg
Josh Wright
Influence
March 1, 2021 11:42 am

This really riles people up. We have a similar situation in the UK where high CEO pay of charities really angers the public. Some understand the need for it as and have already mentioned, but it requires a deeper understanding of the complexity of the largest charities. Humanitarian and emergency aid, for example, isn’t a simple process of just handing over money to those hit by a disaster. It requires quick planning, delicate execution, contingencies against the unexpected and rigorous evaluation. Add to this the risk that some staff face in the field, and you can start to appreciate that it’s not an easy task to lead a charity.

Oxfam GB’s total income was £367.4 million in 2019/20. Source: Oxfam GB Annual Report 2020, https://www.oxfam.org.uk/about-us/plans-reports-and-policies/annual-report-and-accounts-2019/

That’s over half a billion US dollars. The Chief Executive Officer’s pay for 2019/20 was £148,216. I’m including National Insurance and pension contributions in this figure. Doing the calculations, the Chief Executive’s pay was 0.04% of total Oxfam GB income. If we take this a step further and include the Chief Executive, the Chief Financial Officer and all other Executive Directors, their total combined pay (again including National Insurance and pension contributions) was £1,286,966. This is 0.35% of total Oxfam GB income.

If we put this in perspective, charity bosses get bad press given the nature of their job. But the job is a very tough one. And when you look at the figures, perhaps the ‘fat cat’ image of charity bosses is unfair.

Oxfam.PNG
Antonio Rojas
Potential
March 2, 2021 2:26 pm

Public criticism of charities is what has put me off from seeking a job in the charity sector. I know this shouldn’t affect my decision. Criticism exists wherever you go and whatever you choose to do. But I feel you would always have to justify earning a living, especially if you reach senior executive level.

When I was younger I had a goal of running a charity. It was based on an ideal of making the world a better place and wanting to give something back to the community. Over time, my goal has shifted to working on a social enterprise. Charities are mainly dependent on donations, but social enterprises sell a product. Social enterprises face less criticism because they run just like other for-profit businesses. It just so happens that the product you sell is something that helps the community. It also means that if your product is popular, you can earn a good living. For me, the shift from charity sector to social enterprise makes me feel more comfortable. I can still meet my passion of doing something good for society and not have to worry about how much I earn.

I do feel that the pressure and examination of charity pay might drive people out of the charity sector. If you are working in a charity, what incentive is there to advance to a senior position if you have public criticism of your pay constantly over your shoulder?

Rayan Tanwar
Influence
March 2, 2021 10:36 pm

I have a friend who works for a large charity. When I saw this situation, I asked her for some insight 😂 I can’t speak for every charity worker, but this is what my friend told me. The feeling of charity workers is the same as the public! You would think that by working in a charity, you’d understand the need for high pay. But actually even charity employees think it is unfair. There can be such a large gap between the CEO’s pay and the pay of the average worker in the charity, it actually makes employees feel embarrassed to work there. The CEO should get more money, of course. They are leading the charity. But the amount was described as excessive. Just like the public, employees just feel it is wrong for the boss to earn so much, especially in this sector.