Should Charitable Service Be Remunerated?

The emotion of compassion arouses a natural desire to offer service; surely, that is obvious. But does the fact that we have the freedom to offer service to others, with the quality associated with freely giving, mean that remuneration is not justifiable? Hardly! One could say that service is its own reward, and in an important sense, that may be so. But without remuneration, there would be no freedom to continue to offer service as a gift. That would be a deprivation that would undermine our human nature, for the offering of service to each other is a privilege of our humanity that all share. Indeed, when one thinks about it seriously, it is obvious that the privilege of service is not confined to the rich as poor Adam demonstrates in his behavior toward his lord, Orlando. It is an integral aspect of Christian Faith that we are all called to share gratefully in the service of one another.

But what about charities? Charities are voluntary bodies, publicly recognized legal entities established to support good causes. Members of the public are free to choose whether to give to charity, and if so, which charity they will support, whether it is the Children’s Society, the Royal National Institute of Blind People, Oxfam, the local Church, or whatever. Charity law requires that all money raised be spent exclusively on the objects of the charity and that the costs of administration be kept to a minimum, consistent with compliance, effectiveness, efficiency, and good management. Recent changes in state welfare provision have, it is argued, led to the formation of new charities, such as food banks, as well as increased reliance on voluntary support for such basic things as good health care and the creation of work opportunities for young people, among many other services. In turn, this has led to a sharpened focus on those involved in the charitable world, the current performance of charities, their tax arrangements, and questions about their effectiveness and efficiency.

One concern in particular has provoked controversy: are the remuneration packages of the senior executives of some major charities reasonable, fair, and just? The press was apparently “scandalized” to discover that some were paid sums in excess of ?100,000 per annum and that very few were rewarded with a salary of more than ?200,000. The Unite Union took the matter up and publicly deplored the practice, accusing charities of associating themselves with the city pay culture of big business. It charged the charities with exploiting the generous gifts of pensioners and workers who make average or lower wages, thereby undermining public confidence and bringing the work of charities into disrepute: they were, by implication, misusing charitable funds to pay excessive salaries to their senior officers and chief executives. This criticism was taken to extraordinary lengths by some members of the public who registered shock that anyone who worked for a charity should receive any payment at all; charities should rely on the freely given, unremunerated service of volunteers. Of course, many small ones do.

It is likely that there will always be questions about the appropriate level of a chief executive’s remuneration as determined by trustees in the charitable sector. The matters for consideration will be the same in the case of charities as in those that pertain to the public services, the private sector, or indeed the trade unions. In each context, it is the task of those who appoint the chief executive to serve the interests of all the stakeholders, not excluding the respective clients, by appointing the best person. If the responsibilities in each case are comparable, then it is reasonable to assume that the rewards will be comparable too. Actually, when considering the circumstances of a charity, it is the trustees who carry overall legal accountability and must ensure that their appointees are capable of carrying on the business of the charity responsibly. Nevertheless, one might reasonably hope, and it appears to be the case, that those appointed to direct charities would be willing to accept a remuneration package that is less than what they normally would receive were they employed in the private or indeed the public sector. The trustees are themselves, of course, not remunerated for the service they provide. Indeed they are precluded from the possibility of payment, apart from the repayment of out-of-pocket expenses. Their service is freely given.

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