Tackling a hot donor issue, here is the data, findings, and Charity Intelligence's opinion that charity salaries don't help in finding good charities to support.
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Salaries[i] paid to charity staff is a hot topic with donors. Nothing provokes more sound and fury from donors than charity salaries. Some donors hold strong beliefs about whether charity staff should or shouldn’t get paid. Yet the data isn’t revealing any significant indicators about what makes a “good charity”. Recent comments show a lack of understanding of Charity Intelligence’s thoughts on charity salaries. This brief hopefully clears up Charity Intelligence’s findings and opinions on charity salaries.
Charity Intelligence does NOT use staff salaries in our charity rating. We report the salary information straight from the CRA Charities Directorate reports because donors ask for it. Salary information is at the very bottom of our reports because we feel it is the least useful piece of information to giving intelligently and we do not use it in our charity analysis. Simply put, salary information is not a useful tool in finding “good charities” or intelligent giving.
To the many donors who contact Charity Intelligence and in interviews, Charity Intelligence consistently tries to provide donors with context and perspective, to weigh other factors, and take a holistic approach rather than a single focus on overhead costs or charity salaries.
In dealing with strongly held personal beliefs, starting with facts can help establish solid ground.
2015 Key Facts
- 39,917 registered Canadian charities reported staff expenses (47% of registered charities), 44,525 registered charities reported no staff expenses. These charities would be entirely run by volunteers.
- In 2015 charities reported 1,709,249 full-time staff and 1,985,623 part-time staff.
- In 2015 full-time staff compensation was $108.6 billion. The average salary for full-time staff paid in Canada’s charity sector is $63,582. This average covers full-time staff in all charity sectors: doctors, teachers, managers, medical researchers, janitors, fundraisers, and administrative support. Charities working in different sectors will have different labour costs. Some charity workers are unionized, some are not. Where Statistics Canada segregates wages into different industries, the reported charity data just lumps all wages across all industry.
- 57% of the charity sector’s total expenses are for staff salaries and benefits – see Chart 1. ($135.8 billion paid in total staff salaries relative to $240.1 billion in total charity expenses). This percent looks low. Charities are mostly service organizations. It’s a people operation to do charity work. Perhaps our opinion is because we focus on a small subset of large charities or perhaps it shows inadequate cost allocation in filing annual returns. On the total 2015 annual returns, charities report 16% of total spending in a catch-all “other” category. This is sloppy cost allocation. Salaries may be hidden in “other” costs.
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The information in this report was prepared by Charity Intelligence Canada and its independent analysts from publicly-available information. Charity Intelligence and its analysts have made endeavours to ensure that the data in this report is accurate and complete but accepts no liability.
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