Charities are under pressure like never before. They are being squeezed financially by unprecedented central and local government funding cuts, and are in danger of losing out to companies competing to deliver public services under the new Big Society arrangements. 

 

But a new survey published today shows that charities lead the way in one of David Cameron's other big policy areas - fair pay. 
 

The ratio between the top and lowest paid employee in an organisation can be a marker for where on the 'moral compass' they sit. 
 

Andrew Hind, former chief executive of the Charity Commission, and editor of Charity Finance magazine, said: 'The corporate sector would do well to learn lessons from charities about how to make a crucial contribution to society whilst, at the same time, behaving fairly and equitably.' 
 

The survey finds that FTSE 100 companies pay their top earners 232 times more than their lowest-paid employees. This figure is significantly higher than the ratio of 143:1 ten years ago. The picture for local councils, where the salaries of many chief executives outstrip that of the PM, shows a ratio of 15:1; for chief executives of NHS hospital trusts it is 14:1; and for leading universities 19:1 Compare that with charities, where the average ratio is only 4:1. For charities with annual income above £5m the ratio rises to 6:1, and for large charities over £50m the ratio is 10:1. 
 

Andrew Hind continued: 'There are a number of trends in society that need to be reversed. The ever-growing pay gap between rich and poor is one of them. The Prime Minister's Big Society cannot grow in an environment of unfairness and a widening rich/poor divide. 
 

The results of the first ever Charity Pay Ratio Survey demonstrate just how capably most charities are dealing with the difficult challenge of paying salaries which are high enough to attract talented leaders at the top, while still maintaining a sense of equity and fairness amongst the workforce as a whole.'