The leaders of some of the biggest charities risk bringing “the wider charitable world into disrepute” by taking large pay rises while donations are falling, according to the regulator.
The number of executives receiving six-figure salaries at Britain’s 14 leading foreign aid charities has risen by nearly 60 per cent, from 19 to 30, over the past three years.
The charities make up the Disasters Emergency Committee, a 50-year-old group which comes together to coordinate work at times of tragedy around the world.
Research found that the number of staff on salaries of more than £60,000 jumped by 16 per cent to 192 between 2010 and 2012. In some cases the pay of senior staff increased despite falling revenues and donations.
Is it acceptable for charity chief executives to earn £100,000?No. Donors want their cash to go to the poor, not executives. Comparisons with what people might earn in the private sector are wholly false.Yes. These people manage huge budgets and make life-or-death decisions. You have to pay for talent.VoteView Results
The figures will fuel concerns that wage inflation in other public bodies such as local authorities is now leaking into the charity sector and driving up pay among top managers.
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Some of the executives were paid more than the Prime Minister’s £142,500 a year in 2013, which is used by ministers as a Whitehall high water mark.
William Shawcross, the chairman of the Charity Commission, warned that charities were risking their reputations if they were not being seen to get a grip on boardroom excess.
He told The Daily Telegraph: “It is not for the commission to tell charities how much they should pay their executives. That is a matter for their trustees.
“However, in these difficult times, when many charities are experiencing shortfalls, trustees should consider whether very high salaries are really appropriate, and fair to both the donors and the taxpayers who fund charities.
“Disproportionate salaries risk bringing organisations and the wider charitable world into disrepute.”
The analysis also shows these charities are heavily reliant on public funds, having received more than £1.1billion of public money over the past three years from a range of sources, including the Government, the European Union, United Nations and councils.
Despite receiving these large amounts of money, the charities are not subject to the same level of scrutiny or accountability as government departments or quangos.
Priti Patel, a Conservative MP who helped to compile the figures, said: “Hard-pressed taxpayers deserve to know how their money is being spent and will be shocked to see so many highly paid executives in charities that are dependent on public funds.
“This money should be focused on delivering frontline services rather than lining the pockets of unaccountable charity executives.
“As more public money is being given to charities to run services, they need to become more accountable to the public and subject to greater scrutiny and transparency.”
The charities are not required to detail how much their top executives are paid by name, and many express the sums in bands, disguising the true figure.
However, The Daily Telegraph can disclose that Sir Nick Young, the chief executive of the British Red Cross, saw his pay jump by 12 per cent to £184,000 since 2010, despite a one per cent fall in the charity’s donations and a three per cent fall in revenues.
Others in the same pay bracket included Justin Forsyth, chief executive of Save the Children, a former adviser to both Tony Blair and Gordon Brown when they were Prime Minister.
The charity said Mr Forsyth received £163,000 last year, just less than Anabel Hoult, its chief operating officer, who was paid £168,653.
Revenue at the charity is down three per cent since 2010, although donations were up markedly.
Chris Bain, the director of Catholic aid charity Cafod, saw his pay jump by nine per cent between 2010 and 2012, from £80,000 a year to £87,000 a year. Over the same period donations and revenue rose 16 per cent and 24 per cent respectively.
Richard Miller, director at ActionAid, saw his pay increase by eight per cent to nearly £89,000 a year, while both revenues and donations fell 11 per cent.
The top paid executive at Christian Aid was Loretta Minghella, a former chief executive of the Financial Services Compensation Scheme, who was paid £126,072 this year, up from £123,729 last year and £119,123 the previous year.
At Oxfam, former chief executive Dame Barbara Stocking saw her pay rise over the three years, while revenues fell but donations increased.
A spokesman for the Disasters Emergency Committee said boardroom pay at the organisations was “broadly in line” with other charities.
The spokesman said: “The Disasters Emergency Committee plays no part in setting executive salaries at our member agencies but we believe these salaries are broadly in line with pay at other charities of comparable size.
“To ensure the most effective use of appeal funds, a balance must be struck between minimising overheads and ensuring a robust management system is in place.
“Good management of emergency responses in the UK allows our member agencies to deliver the planning, monitoring, accountability and transparency that this work requires and that the public rightly demands.
“The proportion of DEC appeal funds that can be spent by member agencies on the UK management of their disaster responses is capped at seven per cent.
“Over the past five years the DEC has raised over £193 million for its appeals and the cost of raising those funds was less than four per cent of that total.”
A Save the Children spokesman said: “We pay appropriately competitive wages that are benchmarked regularly against two external salary surveys.
“Last year this was supported by an in-depth external benchmarking report from Towers Watson, an expert remuneration agency.
“Remuneration is then decided by the board’s performance and remuneration committee.
“We want to save more children’s lives. We can’t — and shouldn’t — compete with salaries in the private sector, but we need to pay enough to ensure we get the best people to help our work to stop children dying needless deaths.”
A Cafod spokesman said that its director’s pay “remains much lower than any of his counterparts in the biggest NGOs, and has only risen in recent years in line with the increase for other Cafod members of staff”.
A Christian Aid spokesman said: “Christian Aid is mindful of not paying higher salaries than are necessary and/or reasonable.
“The board of trustees has a strict policy that requires us to set salaries at or below the median of other church-based and/or international development agencies.”
The spokesman added that Ms Minghella “brings substantial experience and skills in managing a large and complex operation to Christian Aid, strengths which are reflected in her salary that is on a level comparable with that of others of like position in the sector”.
Janet Convery, ActionAid’s director of communications, said: “Richard Miller’s salary is well below the market rate for a chief executive of a major development charity.”
In a statement, Oxfam said Lady Stocking was due to paid £119,560 in 2012/13 – which means that her pay increased by 19 per cent from £100,008 in 2009/10 “which is in the lower quartile of what other large charities paid for their chief executives”.
It said that Lady Stocking, who left in February, “could expect to earn at least £75,000 more for a comparable job in the private sector”.
It added: “Our chief executive’s pay has increased in recent years because our remuneration committee judged that it was becoming uncompetitive with the rewards on offer at other similar organisations of comparable size.”
A spokesman said: “We believe this is fair reward for a job that involves long hours, large amounts of time away from family and overseeing a £360 million organisation that runs everything from a 700-branch national shop network to major emergency responses and long term development work to improve the lives of the poorest people on the planet.
“Our chief executive is also responsible for more than 5,000 staff and tens of thousands of volunteers. We pay our chief executive less than other charities of similar size and scope – and considerably less than someone could expect to earn running an organisation of this size and complexity in the private sector. Our market research showed that, in the same year, the median pay of other large charity chief executives was £135,700.”
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