Why we should pay charity CEOs top dollar

Like many Australians, I’ve spent some time this week searching for news and updates about the fire crisis engulfing our country.

Everyone is looking for opportunities to help; we’re asking about which organisations and charities are the best ones to donate our hard-earned dollars to, in order to make the most impact.

This is absolutely spot on – everyone should do their due diligence before handing over a cash donation to anyone.


But there is one particular line of thinking that crops up over and over… and I can’t help but think it’s a little bit misguided.

It goes something like this:

“I would like to know which charity spends the most money per dollar donation on the actual animals/people/fires/recovery effort. I’ve heard of XYZ charity where the greedy CEO pays himself $200,000+ a year – and I don’t want to give to someone like that”.

Some even complain that when a charity pays its staff high wages, it’s technically “fraud”.

I understand these concerns.

And while I totally agree that it is unacceptable for charities to waste money on administration, excess travel and entertainment, and other miscellaneous expenses that could be curbed – I don’t believe staff expenses is one of them.

The reason for this is that high quality leadership at the top is essential if you want to run an efficient organisation: one with strong strategic thinking, high levels of fundraising and that can make a bigger impact overall.

And high quality leadership isn’t cheap.

The CEO that works for a charity and earns $150,000, $200,000 or even $300,000 is already quite likely to be taking a massive pay-cut.

In the private sector, working in IT or banking or finance, that same person could easily pocket upwards of half a million dollars per year. Just look at Alan Joyce!

For a charity to attract an experienced, qualified and clever CEO who is going to lead them forward, unleash a high-impact marketing campaign, make a big impact and grab your attention (compared to the thousands of other charities all competing for your dollars) and generally help them grow, they’re going to need to offer some incentive.

No matter how passionate a person is, they’re unlikely to cop with the long hours, the stress, the pain and the people issues that go with running an entire business, for $50,000 a year.

So, by all means: qualify the charity you’re supporting. Check out how ethical and transparent they are. But don’t judge their CEO salary too harshly – because without paying that price, they might not flourish in the future.