Fair Pay in Canada’s Charitable Sector?
The charitable sector in Canada relies heavily on its people, with staffing costs accounting for roughly half of organizational expenses in recent years. This reliance introduces complex decisions regarding compensation, complicated by debates over the appropriate use of donations and concerns about high salaries. Amid a cost-of-living crisis, charity leaders face the challenging task of balancing fair employee compensation with the provision of essential services. This balance is crucial not only for retaining current employees but also for attracting diverse talent essential for the sector’s success.
Understanding the Numbers
Our recent CICP survey on salaries and benefits (CICP survey No. 2.3.9) sought to understand how much the average employee is being compensated in the charitable sector across different levels of seniority and across regions, sizes, and sectors of activity. In general, our data indicates that the sector’s wages generally fall below expectations.
As of January 2024, the average salary in Canada stands at $1,228.01 per week or $63,856.52 per year for full-time employees. In contrast, our data indicates that full-time roles in the charitable sector lag significantly behind, with starting salaries for entry-level positions averaging $40,786 and mid-level averaging $51,427 per year. Only executive level positions are barely above the national average (which includes all levels of professional average) with a reported $69,919 per year.
Examining Executive Salaries
Interestingly, our data shows that executive roles in the sector are compensated at an average starting salary of $69,918 per year, slightly above the national average for full-time employees. For comparison, however, the average salary for similar level positions in the broader Canadian economy is $148,253 (for a Chief Executive Officer), and $78,653 (for an Executive Director) in 2024.
The Debate on Executive Pay
The debate surrounding executive pay in charities has persisted for some time. Critics argue that high salaries conflict with the altruistic aims of the sector. However, voices like Dan Pallotta contend that sacrificing pay overlooks the challenges that charity and non-profit workers face, often with fewer resources than their for-profit counterparts.
Charity Watch emphasizes that salaries should align with the skills and experience necessary for organizational success – ‘High salaries should not signal a red light to not give just as low salaries should not signal a green light to give.’ Inadequate compensation can hinder a charity’s effectiveness, leading to high turnover rates and diminished program quality. Moreover, to attract and retain skilled employees, charities need to offer competitive wages, as they are in competition for talent with the private sector and government. Several panellists in the survey also share this view in their open-text comments:
“We feel strongly that to have the best people working for us and to retain staff we need to offer salaries and benefits that are competitive with for-profit and government organizations.”
A Call for Equity
Our findings, alongside research such as the Imagine Canada’s Diversity is Our Strength 2022 Report, highlight that the sector primarily struggles with low pay rather than excessive compensation. Factors such as existing funding models and inflation post Covid-19 pandemic contribute to undervalued work, excessive hours, and employee burnout.
“We recognize gaps in our compensation model but feel powerless to address them as we do not have the funds available to pay a living wage.”
“Salaries have not increased relative to inflation and performance. When inflation is factored, I am making approximately the same as when I started with the organization over a decade ago although the complexity of the organization has more than doubled (based on budget, staffing, programs and services, outputs etc.). It is incredibly discouraging and demoralizing. Extra days off do not help because they don’t pay my bills and I usually end up working them anyways.”
“Our organization was able to increase employee capacity and wages during the pandemic with the support of federal and provincial resiliency funding programs. We anticipate having to decrease employee capacity and wages moving into 2025 as operating funding is becoming more competitive with less chance to increase annual amounts in alignment with the pandemicera funding boost.”
The situation is even more pressing for some charities in remote areas:
“We are rural/ remote and have to also offer than people can stay onsite for short periods till they find (if they find) housing. We also offer a low cost meal plan when we are cooking for programs. Employment is going to give me a heart attack – literally. I have an entriely new admin staff and kitchen staff after three years. The turnover is so awful and time consuming. All good reasons, but we can’t move forward and it am starting to burnout and feel little joy in what I do. Which makes it really hard to lead.”
A plea for equity within the charitable sector is evident. Policymakers, philanthropists, and sector leaders must reevaluate compensation to attract, retain, and fairly reward the dedicated individuals who form the sector’s backbone. Fair pay is not only a financial consideration but an investment in the sector’s sustainability and a reflection of collective values.
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