THE BLOG
18/11/2013 08:12 GMT | Updated 23/01/2014 18:58 GMT

The Monopoly Board: Why Paying Trustees Isn't the Best Way to Invest in Your Board

If we want the third sector to maintain its well-respected image and continue to thrive, surely calling for charities to spend their money on training to improve the work of its senior decision-makers should be top of our agenda before we offer out salaries.

Sparks were ignited and fireworks flew across the charity sector when Lord Hodgson reviewed the 2006 Charities Act last July and concluded that charities with an income of over £1million should be entitled to pay their trustees. Debates around diversity on boards, public trust in charities and the moral and ethical ethos of the third sector lit up the skies once again during Trustees Week. As a young charity trustee, this is the first time I have delved into the argument in great depth and my views that trustee work is invaluable to the sector remain unchanged. However, I am fully against the payment of trustees for a number of reasons.

By far the strongest argument against paying trustees is that it detracts from the inherent nature of the voluntary sector, which is just that; voluntary. Motivation to create social change and often dissatisfaction with the way things are is what draws people into charities and charity work. That element of motivation is integral to the role of the trustee, whose actions and decisions have a tangible impact on staff, volunteers and beneficiaries. Trustees need to believe in the cause, not the salary.

Financial stability and sustainability is something all trustees should be aspiring to for their charities. Most charities are heavily dependent on their supporters' donations, meaning that building up trust with the public is crucial. Who do you think the public are going to define as more trustworthy - a trustee motivated only by the desire to use their skills and expertise to benefit the charity they are working with, or a trustee who may share some connection to the cause but will only apply for paid roles?

In fact, 57% of the British population would be put off donating to a charity if they felt too much was being spent on staff salaries. 42% feel confident that their donations would be spent wisely if a charity was run mostly by volunteers. Concerns over the impact on public trust in charities (and therefore donations) if a previously voluntary role suddenly became a paid one seem justified.

For those arguing that opposing the paying of trustees is indicative of a nanny state and that nobody has the right to tell charities how to spend their money (fair point), I ask them to carefully consider the impact on public trust and how this may affect donations for your cause. After all, if we want charities to be independent and forward-thinking, we need trustees to increase income, not reduce it through additional salaries or loss of public donations. This has never been more important than in a time where charities are battling against the worst recession they have witnessed for 50 years.

Payment is viewed as a means of encouraging more diversity on trustee boards and making trusteeships accessible to all. Admittedly, the lack of diversity is something which really needs to be addressed; females, young people and ethnic minorities are massively underrepresented and the average British trustee is a 57 year old man.

However, the Charity Commission's report 'A Breath of Fresh Air' found that the strongest factor preventing people from becoming trustees was lack of information and understanding of what the role involves. In other words, lack of payment wasn't perceived as being a barrier to becoming a trustee.

Money which would be spent on salaries is better used on campaigns to make sure people are aware of what trustees do. It seems demeaning to women, young people and ethnic minorities to assume that the only way they will become trustees is if somebody turns up with a pay cheque for them. Surely reimbursing reasonable expenses is a better way of removing any kind of financial barriers?

If we are going to argue that offering payment would encourage more expertise on boards (such as accountancy skills, etc.), I think we have to ask ourselves whether an extra couple of grand is really going to be the deciding factor for somebody who is likely to be already earning at least £40k-£50k.

On the other hand, if more experts do apply when offered payment, what about the smaller charities who don't have the funds to pay trustees and therefore have an unfair disadvantage? Aren't we just creating inequality in a sector that is designed to fight against it?

My own decision to join a trustee board was largely influenced by a passion for the cause and by volunteering experiences. Despite being an expenses-only intern and living in Oxford with a student loan to pay off, there is no way you would have needed to pay me to share my campaigning skills and insight from my volunteering experiences with the board. Simply having my travel expenses to London covered (pre-booked, off-peak and with a railcard to cut costs) made a trusteeship accessible to me.

Despite being responsible for all the legal, financial and strategic decisions for a charity, one third of trustees do not receive any training for their role and this not dependent on the organisation' s income. Sam Younger, chief executive of the Charity Commission, released a statement earlier this week saying "trustees regularly fail to understand their duties." He is advocating more regular training for charity trustees to fully understand their role as concerns about poor governance featured in 597 of 1,374 assessment cases last year.

If we want the third sector to maintain its well-respected image and continue to thrive, surely calling for charities to spend their money on training to improve the work of its senior decision-makers should be top of our agenda before we offer out salaries.

Over two thirds of people in the voluntary sector shared my view when a survey of a 1,100 charity personnel revealed that 67% oppose the decision to pay trustees. Perhaps an opposition as strong as this is a clear indication of why the Cabinet Office ruled out Lord Hodgson's recommendation.

"Those who can, do. Those who can do more, volunteer." Don't pay trustees; there are better ways to invest in your board.

Kindly reproduced with permission from nfpSynergy (nfpSynergy.net) Data from Charity Awareness Monitor