FAQS for fundraisers – How to talk to supporters about chief executive pay

Fundraisers are on the front-line, speaking to the public about good causes, making the case for support, and providing a great experience for people through our fundraising. Part of this is responding to the questions and concerns that people might have so that they have all the information they want and can feel that their money is going to be used in the best way for the cause they have given.

An area that does get attention is how much charities pay their senior staff and in particular Chief Executives. Fundraisers, often working with comms teams, may well be the ones that need to answer those questions, from existing or potential supporters. This short guide provides some thoughts and ideas about how fundraisers can respond in the right way to deliver an excellent supporter experience.

Some quick Do’s and Don’ts…
Do's
Don'ts
  • Be open and welcome the opportunity to have a conversation with an individual
  • Be defensive and annoyed that the person has asked in the first place!
  • Try to find out more about the supporter is interested in or concerned about so that you can offer the kind of information they want
  • Answer a different question that you wish they had asked
  • Provide information (not just numbers) – take the chance to explain and contextualise, explain costs are investments and in the best interest of the charity to do the most good in the long-term.
  • Just signpost to the annual report – financial accounts do provide information, but they’re prepared primarily for regulators, not the public
  • Listen - and answer the question they have asked
  • Be secretive and opaque, you’ve got nothing to hide and this is a great opportunity to give someone a fantastic experience of interacting with your charity
  • Be prepared – your digital/marketing/supporter care/community fundraisers should all be able to respond to a supporter’s questions
  • Just give them a generic email address to contact – try and have a conversation if possible
 
  • Have examples, case studies, and stories about real impact your charity has had, and the CEO’s role in making them happen
 
How to talk about chief exec pay: three key points
  1. Be transparent on how senior executive pay is set. Explain the process you have in place to attract the very best. The CEO doesn’t set their own pay – it’s done through trustees who have a responsibility to make sure the charity can achieve the best it can for its beneficiaries and cause. That includes thinking about the skills, experience, and responsibilities that they need to have in a CEO to lead the organisation. These trustees will have to navigate complex areas and come to tough decisions requiring them to carefully think about the resources they have, as well as the ambitions and needs of the charity over the coming years. It’s essential that they hire the best person they can find with their available resources so they can reach the ambitions they have.

  2. Tell them why it’s important that charities pay their staff. It’s fantastic that charities have people that freely volunteer their time on behalf of a cause they care about. But not all charities can be run by volunteers alone, and its right and proper for them to employ staff in a whole range of roles. Charities have to deal with difficult and complex situations, from striving to find a cure for cancer, working to relieve poverty, looking after people at the end of their lives, caring for our most beloved and important institutions and places, as well as doing critical work abroad. It is absolutely right for Trustees to decide to pay people to help the charity reach their objectives, and choose someone with the right experience to lead their staff and volunteer teams.

  3. Connect to the supporter’s point of view. Together with our supporters, we’re united in achieving hugely important things - from curing diseases, caring for the most vulnerable people, or providing relief during a national emergency. A supporter cares about these things – so help them understand how the money spent on the CEO or other salaries is fundamental in enabling that charity to do their work. It’s likely that they will want the best people to help the organisation deliver those ends, so explain how your charity endeavours to spend every generous donation in the best possible way to achieve that.

 

Be prepared and ready to have a conversation with a supporter

The best way to be able to respond to a supporter (whether online, face to face, or through a telephone call) is to be prepared and ready with the right information, examples, and case studies. It’s a good idea to make sure that your fundraisers, and others in your organisation, have the right information in advance – prepare and send round sample FAQs or discuss in your teams the right way to respond to supporters.

How quickly can someone find out your chief executive’s salary or charity spending? It should be easy and accessible to find on your website, not hidden in an annual report. Do your staff know where it is and are able to direct someone there easily?

Is the information clear and easy to understand? Present the facts clearly, and use the opportunity to set the information in context – illustrate it with examples of the impact you have had: case studies, stories, infographics. For good examples of explaining internal operations in an engaging and clear way, look at British Red Cross, RNLI, NSPCC, ActionAid.

Other common questions about how charities spend their money

Questions about CEO pay can often lead to other conversations about how the charity is run and how it spends its money, so it’s worth thinking about your potential responses to these areas too.

“Why do charities spend money on admin, fundraising and overheads?”

Overheads and admin costs are a way that charities need to report on their finances to the Charity Commission, alongside money that is spent ‘on the cause.’ It is an unfortunate distinction, because the money spent on admin or governance or fundraising is essential for the charity to be kept running and to deliver their work.

Rather than it being an alternative to being spent on the cause, it should be seen as complementary: a charity needs to pay the electricity bills, rent, have a computer system, and train staff. It needs to be able to raise funds to deliver its work in the future. The public and supporters will understand this, but it’s worth explaining it in accessible and clear ways as ‘admin’ costs doesn’t give any information really on why that cost is necessary or explain why it’s money well spent.

Investing in fundraising is also a good and responsible way for charities to ensure that they can be here for years in the future and do more for their cause. It does cost money to raise money, whether that’s in paying to send out a newsletter, to produce promotional materials, or to pay fundraising staff. Money invested in fundraising is money well spent – it keeps the lights on, and the charity working! It also delivers a really good return, with on average around £4 made back for every £1 that a charity invests in fundraising. Research shows that the public tends to overestimate how much is spent on fundraising and admin so any opportunity to explain to a supporter how a charity spends its money should be taken.

“Why does only a percentage of my donation go on charitable activities?”

Supporters who are curious about how charities raise and spend money can use the Charity Commission’s search tool to find their charity and then click through to a breakdown of both income and spending. There are also some websites and resources that try to rank and compare different charities on their effectiveness and how they spend their money. But calculations on cost ratios or fundraising costs are not a measure of the effectiveness of your charity. Charities vary in size, cause, supporter base, history, geographical area and beneficiaries.

Try to avoid any comparison or ranking between charities – one organisation’s costs and decisions will be specific to that particular organisation. Different causes and sizes of charities mean that it’s really hard to make meaningful comparisons between organisations – so always try to put the emphasis on explaining the decisions that your charity has made to make sure that it is working as effectively as possible.

Talk in terms of things like “lives being changed by our great work on the ground” or “The positive impact that you make is down to the collective work of having people, systems and resources to make it happen, and it’s the chief executive who ultimately makes that happen, reporting to the voluntary Board of Trustees.”

“How much of my money is going towards the cause?”

100% of donations go towards the organisation achieving its goal. Make it clear that includes everything that’s needed to make it happen – including a dedicated team and effective administration.

Illustrate it by explaining that they’re also paying you to raise awareness and funds for the continuation for the work. Your charity needs you to ask people to donate and care about the cause, and if people didn’t the world would be a different place! Show case studies, impact, and stories about the great work you do and the difference you make.

 

· If you have any questions about how fundraisers can talk about chief executive pay, contact us on policy@institute-of-fundraising.org.uk or on 0207 840 5493.

· For further information or reading on this topic, take a look at: ACEVO’s Good Pay Guide and its five principles for setting pay, How to talk about paying staff in charities from NCVO, NCVO’s report on charity executive pay from 2014, ACEVO’s blog on charity leader’s pay from 2019.

· The Institute of Fundraising (IoF) is the professional membership body for UK fundraising. We support fundraisers through leadership and representation; best practice and compliance; education and networking; and we champion and promote fundraising as a career choice. We have around 6,000 individual members and over 600 organisational members who raise more than £9 billion in income for good causes every year. www.institute-of-fundraising.org.uk