Charities have been told to publish full details of the pay of their senior executives, to help them maintain public trust.
The recommendation came in the report of an inquiry into executive pay set up by the National Council for Voluntary Organisations (NCVO).
Legally, charities are required to indicate the number of staff in pay bands over £60,000 in their annual report.
But the report, published at the end of April, recommended that to sustain public trust, they go further and publish the exact salaries of named senior staff members in an accessible place on their websites, ideally no more than two clicks from their home page.
It also recommends charities consider publishing the ratio between their highest and median salaries, to give an indication of pay throughout their organisation.
The inquiry examined extensive evidence on charity salaries, finding that senior staff in charities tended to earn substantially less than their counterparts in equivalent private or public organisations of up to 25-45 per cent at senior levels.
The recommendations and associated guidance produced by the inquiry on how charity trustees should go about setting senior pay have received the backing of the Charity Commission.
NCVO chair Martyn Lewis, who also chaired the inquiry, said: “Many of the charities the British public are proudest of are major operations employing thousands of people and managing tens or even hundreds of millions of pounds.
“They need highly skilled professionals in order to run to the highest standard possible and make the best use of our donations. But we believe that where they feel they need to pay high salaries in order to recruit the right people, they should be clear in explaining this to donors.
‘Doing this will make it clear that we believe in being open and honest with donors. We don’t want anyone ever to be able to claim that charities have hidden or obfuscated information about their salaries. I hope charities will consider this an extra opportunity to explain their work and the difference that they make.”
The team at Nicklin have extensive experience in working with charities, which means that we are able to offer expertise in all financial issues affecting this sector, including those relating to remuneration. For more information, please contact us.