15-05-2025
The row over charity CEOs' six-figure salaries
Olivia is exhausted. She runs a charity shop in a regional town centre and earns just under £23,000 a year – as a result, she can barely afford rent and bills, let alone new clothes, holidays or meals out. Her day starts at 9am, finishes at 6pm, and she rarely has time for a lunch break.
'I'm lucky if I wolf down a sandwich without customers asking questions or clothing needing to be tagged or sent off,' she says. 'But whenever I ask for more money, I get told there is nothing left – with the implication that if I really cared about the organisation I wouldn't be looking for a raise. But if that is the case, how come our CEO is earning over £100,000? It feels very unfair.'
Olivia – who has previously suffered from the illness her charity raises money for – is not alone. The public increasingly sees six-figure CEO salaries as the number one reason to stop giving. The sector is struggling more than ever – services are being cut, helplines are being disbanded and entire teams are being made redundant – and yet those ensconced in the executive suites are earning healthy salaries.
'The subject has become incredibly controversial,' says Lauren Weymouth, the editor-in-chief of Charity Times. 'I think it is in the spotlight because the cost of everything is now so much higher, which breeds a lot of resentment as people are constantly being asked to give money to charities that have CEOs on far higher salaries than they could ever dream of.'
One institution that has come under flak is Macmillan, whose CEO, Gemma Peters, earns £190,000 a year. It has been a tough year for the cancer charity: earlier this year, it announced that it would be making 400 people redundant and axing its flagship grant scheme. This month, more cuts have been made, most notably to its £14 million advice helpline, which will no longer offer in-depth advice.
'The board – the same people who agreed my salary – hold me to account and drive a very high standard,' says Gemma. 'I get it; there are people who think it's a huge amount of money, but there are other people who think it's a big job and paid commensurately.'
At the same time, the company is hiring a handful of senior roles, including a director of strategy and transformation on £119,000 a year, a head of product (£88,500), a head of corporate partnerships (£88,500) and a head of national partnerships (£76,000).
One former employee said to The Guardian: 'Staff are utterly dismayed by changes made to key services… while Macmillan not only remains a hierarchical organisation but hires yet more managers and senior managers with huge salaries.' The charity has responded by saying that a recruitment freeze was put in place during the restructure last year but that these roles now urgently need to be filled.
Macmillan is not alone in closing services and initiating redundancies – and in many cases these decisions are being made by executives on six figures. Scope, a disability charity, is set to cut up to 124 jobs while also closing a number of stores, and yet its CEO, Mark Hodgkinson, earns £150,000. Age UK is closing various sites around the UK with CEO Paul Farmer on £192,000, while Cancer Research UK has announced that it has 19 per cent less money to invest than it did five years ago, with a chief executive, Michelle Mitchell, earning a base salary of £276,000.
'The investment in our leadership has been carefully considered, to ensure the best use of our supporters' donations, to accelerate life-saving cancer research,' says a spokesperson for Cancer Research. A spokesperson for Scope says, 'We benchmark using organisations of similar purpose, size and complexity and consider this together with Mark's experience to establish the salary level. Mark has not had a salary increase since April 2019.' Meanwhile, Age UK say that the 'CEO salary… is set by the board of trustees, who take into account the range and the breadth of the skills and experience required for this role which plays a key part in the charity's work in helping millions of older people each year.'
None of this is playing well in the public domain. In the comments section of an article The Telegraph recently published on why people are giving less to charity, the focus was firmly on CEO remuneration. 'One look at the salaries executives pay themselves is enough to put anybody off giving,' said one reader. 'For me it was a growing realisation that these big charities are in fact corporations that mainly pay for huge staffing costs with a sideline in helping people. I'd rather help out friends who are struggling,' said another. 'The real reason people aren't giving to charities any more is because we, the people, have cottoned on to the fact that charity bosses overpay themselves,' said a third.
Phil Kerry – the CEO of New Horizon Youth Centre, which brings in about £3 million annually – earns around £85,000 a year and understands why people feel angry. 'Charities are unique in that we are stewarding other people's money, and that comes with a responsibility to spend it in the best possible way,' he says. 'And I agree that healthy checks and balances are needed in the sector. The bit where this gets confused is [the conflicting opinions] about what exactly charities are in the year 2025.'
According to Kerry, the British public still tends to see charities as they were in the Victorian era: noble grass-roots organisations run by a small number of people doing good in the community, usually for no financial remuneration at all.
'In those situations, yes, it would be odd to have a CEO on a six-figure salary,' says Kerry. 'But if you look at most major charities today, whether they deal with housing, health, education or justice, you will see they are vast operations that have become integral to the functioning of our society. It has been this way since the 1990s, when Labour decided that charities should come in and provide a third-way service, and it is important to remember that if these charities ceased to exist then the Government would have to step in to fill the gaps. They are often the most cost-effective solution we have.'
As a result of this exponential growth, 'working in charity' has become a high-status career akin to one in the arts, publishing or law. CEOs, meanwhile, are juggling more balls than ever before.
Oxfam, for example, brought in more than £300 million last year, employed 4,000 staff and 20,000 volunteers and ran more than 500 shops. This makes the CEO's £125,000 salary seem rather low, particularly when you compare it with what an equivalent-sized private company would probably be paying for a CEO role – probably somewhere between £500,000 and £1 million a year.
'Would you be willing to run a company that impacts that many lives for £40,000?' asks Weymouth. 'A lot of these charity CEOs are lying awake worrying; they're burnt out, stressed, their phones are constantly on and they carry the pressure of meeting the charity's goals and saving lives, of securing income and funding and keeping staff happy. It requires multiple hats and charities wouldn't achieve their margins without really good people at the top. These are people who could run a FTSE 100 company but have chosen to work in the charity sector, but they still need a salary that is reasonably competitive, otherwise they will go elsewhere.'
Kerry agrees. 'I don't run a ginormous organisation but I do run a complicated one that does a lot of complex political work and I do feel it is fair to pay me well,' he says. 'To be honest, I think we should get charity pay up at all levels: the private sector pays well and has bonuses, the public sector has great pensions – we have a million people working in the charity sector who get neither.'
Equally, while there are many charity executives on very healthy salaries, those who receive remuneration in the high six or even seven figures usually work for companies that don't rely on donations from the public.
This includes the Wellcome Trust, a charity that makes its money from an investment portfolio and which last year paid its CEO at the time, Nick Moakes, £5 million; and Nuffield Health, an institution that uses money from endowments and its own revenue streams for charitable causes, which last year paid its CEO at the time, Steve Gray, more than £1 million.
Where the question of pay becomes more complicated is when you look at the discrepancy between what charity bosses and more junior employees earn – particularly given that the latter are more likely to be personally very passionate about the charity. As Olivia notes, she and a number of her colleagues have all suffered from the health issue their charity focuses on and have dedicated their lives and free time to raising money for it, whereas the CEO came in a few years ago from an entirely different organisation.
'The third sector can exploit workers' idealism or generosity,' says Andrew Speke from the High Pay Centre. 'You will speak to a lot of people on relatively low pay or longish hours, and they are told that because it is for a good cause and because we don't have the money, they should just accept it – there is something to be critical of there. Not least because this expectation of altruism is not there at the same level in the executive suites. But in the context of the wider economy, pay discrepancy in charities is not that bad compared to the private sector.'
It also seems unlikely that charity executive salaries will go down any time soon – so what feels critical is for these institutions to find a way of reaching out to donors who have become wary of giving their hard-earned money to what they now see as profligate companies.
'Transparency is the only way forward: charities have to be brutally honest about why they are choosing to spend that [on wages],' says Weymouth. 'I think they could be a lot more honest about why someone on a certain salary has helped to impact the amount of money they are raising moving forward.'
As for people like Olivia – people who are toiling away for low wages for a cause they feel passionate about – there is not a huge amount of hope on the horizon. 'I don't think I'll be getting a raise any time soon,' she says, somewhat forlornly. 'I suppose they think they can replace me quite easily, whereas the CEO is important and needs to be kept happy.'
