Part 2: There has long been a pervasive belief that high salaries in charities are inherently a problem. Many donors and supporters still cling to the outdated idea that charity workers, in order to be virtuous, should also be underpaid.
This mindset is not only archaic but damaging, particularly in a world where charities are expected to deliver high-quality, sustainable impact. The conversation around fair compensation in the charity sector needs to evolve, especially when the true cost of running a successful organization goes far beyond simplistic salary figures.
At the heart of this issue is the principle that non-profit salaries should be low, but this ignores the reality of running an effective charity. Attracting and retaining top talent is essential for organizations that want to make a meaningful difference, and competitive salaries are part of the equation. Professionals in the charity sector often possess a wide range of skills—project management, fundraising, strategic planning, and program delivery—that are essential for delivering long-term impact. Paying these individuals fairly ensures that the charity can sustain its mission.
Yet, despite the crucial role that skilled professionals play, many people hold charities to an impossible standard: they are expected to solve complex societal problems while operating on shoestring budgets. This imbalance becomes especially apparent when we consider the role of multi-skilled employees in smaller charities.
The Burden of the “Overhead” Myth
Another outdated principle causing significant harm to the charity sector is the way many grant givers, trusts, and foundations judge charities based on overhead costs. While well-intentioned, this focus is deeply flawed and often results in counterproductive practices that hurt charities more than they help them.
The logic is simple: many funders assume that low overhead means more money goes directly to charitable activities, thus making a charity more “efficient.” However, this is a simplistic view that fails to recognize the actual costs associated with effective program delivery.
Consider the example of a small charity that employs only a few staff members. In such cases, one individual may wear multiple hats: managing operations, fundraising, and even delivering programs. Because of this multitasking, their salary may appear high relative to the organization’s overall budget. But this does not mean the charity is overpaying staff or squandering funds. On the contrary, that individual’s work spans multiple functions, including program delivery, which directly advances the charity’s mission. To classify their entire salary as overhead creates a misleading picture.
This is especially true when comparing such a charity to larger organizations that have dedicated staff for each function. In a larger charity, separate employees might handle operations, fundraising, and program delivery—each with their own salary. Yet, because these salaries are distributed across different categories, the organization’s overhead percentage appears lower. A high salary for one person in a smaller charity might look disproportionately high, but in reality, that individual is covering the equivalent of three or four roles. This structure often leads to inflated overhead costs that don’t accurately reflect the scope of their work, which includes program delivery, and should be categorized as a charitable expense.
The Damage of Misguided Judgments
Judging a charity purely by its overhead costs can have serious consequences. It can prevent small organizations from attracting the talent they need to grow and achieve greater impact. When funding bodies apply pressure to reduce overhead, they effectively force charities into a corner where they must either underpay staff or fail to invest in essential infrastructure like training, technology, and compliance.
This narrow focus on overhead also discourages innovation. Charities may avoid investing in new technology, marketing, or data-driven strategies that could significantly enhance their impact, all because they fear being perceived as wasteful. In this context, the fixation on low overhead becomes not just an operational challenge but a barrier to maximizing social good.
Attracting the Next Generation of Charity Leaders
The issue of fair compensation in charities is especially relevant when considering the challenge of attracting young people into the sector. Many young professionals are eager to contribute to causes they care about, but the reality is that passion alone cannot pay the bills. The charity sector, like any other, must offer competitive salaries to draw in the next generation of skilled workers. If young people see charitable work as a career that is unsustainable or underpaid, the sector risks losing out on fresh talent, new ideas, and energy that could drive the future of social impact.
For young professionals weighing their career options, the charity sector should be just as attractive as the private sector, and salaries play a large role in making this happen. Without fair wages, the best and brightest may turn to other fields, leaving charities struggling to find the expertise they need to navigate complex societal challenges. By offering salaries that reflect the value of charity work, the sector can ensure it remains an appealing and viable career path for young people.
The Role of Government Support
To help charities attract and retain talent, more government subsidies and benefits could also be introduced to encourage people to stay in the sector. Honorary doctorates, loan forgiveness programs, and additional benefits similar to those offered to professions like nursing could be part of this solution. These kinds of recognitions not only boost the perceived value of working in the charity sector but also offer real incentives for people to commit their careers to causes that benefit society at large.
Government intervention in the form of subsidies and grants could play a crucial role in easing the pressure on charity salaries while also reducing overhead concerns. By recognizing charity work as vital to societal well-being—on par with education or healthcare—the government can help bridge the gap between public expectations and the financial realities of running impactful organizations.
A New Paradigm for Charity Funding
It’s time for funders to rethink how they assess charities. Instead of fixating on overhead costs as the primary metric of success, they should focus on outcomes—on the actual impact the charity delivers. The salary of a multi-skilled employee should not be viewed as a burden but as an investment in expertise, efficiency, and the charity’s overall mission.
By moving beyond this archaic thinking, the charity sector can evolve into one that values professional expertise and provides the resources necessary to drive real change. This shift will enable charities to thrive rather than merely survive, ensuring they can make the greatest possible impact in the communities they serve. Funders, donors, and the public at large must recognize that overhead is not the enemy of charity—it is often the foundation upon which sustainable, high-impact organizations are built. With fair compensation, government support, and a focus on outcomes over outdated metrics, the charity sector can become a more robust, attractive space for the talent needed to address today’s most pressing challenges.
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