Charity executive salaries: a century-old concern

In recent weeks, one topic has repeatedly cropped up rather quickly in conversations I’ve had at the various sector events, conferences and launches on which I’ve been unleashed. That topic is the feature Third Sector has put together on executive salaries in our March edition, out this week.

Exec pay is a sensitive topic, and some have suggested that Third Sector should not even be looking at the issue, that it is a sensationalist distraction whose examination simply gives more fodder to the sector’s critics. I would point people to various studies and reports demonstrating that the public has a strong interest in charity executive pay, and therefore it is something we should be looking at.

And as I discovered a couple of weeks ago, that public interest is longstanding. I’ve recently finished reading The Ragged Trousered Philanthropists, a work written in 1910 and published in 1914 (albeit then only in a heavily-edited form) describing the miserable poverty and powerlessness of the working classes in early 1900s Britain. An influential work for left-wing and trade union movements, it is utterly one-sided and didactic often to the point of patronising, but nonetheless well worth a read for anyone interested in inequality and social change.

The titular philanthropists are the working classes; the idea is that the workers’ readiness to accept their lowly position and work themselves (and their trousers) ragged in order to enrich their master, is essentially charitable. In charting the philanthropists’ various travails, the book contains a short chapter on a charity known simply as the Organised Benevolent Society – described as “one of the most important agencies for the relief of distress”.

Among the first details the books reveals about the OBS is that it had an income – entirely voluntary – of £300 according to its most recent accounts, and that the largest item among its spending was the £100 salary of its secretary. Now, while I don’t imagine that anyone in the sector would endorse 33 per cent of a charity’s income going on executive salaries, I found it striking that executive pay was front and centre in the public’s mind a century ago, much as it is today.

The book goes on to describe the fact that while the secretary position was desirable, it would not do for people to appear keen to take it on – presumably to avoid the perception that candidates were motivated by self-interest or greed. “The secretary of the OBS was usually regarded as a sort of philanthropist by the outside public, and it was necessary to keep this fiction alive,” it reads.

The chapter goes on to criticise the office and stationery expenses of the charity, its refusal to be open about its spending or its impact to various stakeholders including the press (this of course would never happen today), its lack of success in actually changing social conditions, and for being a hobby and source of self-validation for its volunteers above a charitable venture. These latter points are a rare antidote to the praise usually heaped on Victorian philanthropy.

There is clearly modern-day pertinence in all of those topics, and it takes no great feat of imagination to think that executive salaries might again prominently feature in an equivalent work written in another 100 years’ time.

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