Policy, campaigns & research, Armed Forces charities research

#CharityFact 1: Armed forces charities pay their employees wisely

The first in our new weekly instalment of evidence on the armed forces charity sector, this week’s #CharityFact focuses on employee pay.

There are many myths and misconceptions about charities. Unfortunately, armed forces charities are no exception. At the Directory of Social Change (DSC), we believe you need two things to combat this: you need to know the facts and you need the evidence to back them up.

That’s why, over the next six weeks, we’re bringing together the facts in short instalments. These facts are based on our new research, funded by Forces in Mind Trust.

In this first instalment, we take a look at #CharityFact number one: Armed forces charities pay their employees wisely.

What is an armed forces charity?

To begin, we should first establish what we mean by an armed forces charity. At DSC, we use a definition you can find in one of our early reports on the sector:

“Charities that are established specifically to support past and present members of the armed forces and their families (the armed forces community).”

There are currently 1,760 armed forces charities operating in the UK. You can see this for yourself on our interactive database. This research focuses on 1,428 of those charities. Specifically, those registered with the Charity Commission for England and Wales (CCEW for short) with published accounts. For more details, see the methodological notes accompanying our research.

How many people do armed forces charities employ?

Armed forces charities employ at least 9,972 people. We stress ‘at least’ because this figure is based only on charities with an annual income over £500,000 (due to reporting requirements at CCEW). As we’ll see in #CharityFact number five, that’s quite a small proportion of the sector.

And how much do their employees get paid?

The evidence reveals that 9,604 employees of armed forces charities earn under £60,000, as shown on the chart below. That’s about 96% of all armed forces charities’ emlpoyees.

Returning to the chart below, if you now click the ‘£60,000 to £100,000’ button, you’ll see the dial drop down to 317 employees. In other words, about 3% of all employees earn between £60,000 and £100,000.

What about those earning between £100,000 and £150,000? After clicking ‘£100,001 to £150,000’, the dial drops again, this time to 47 employees. As a percentage of the employees in armed forces charities, that’s now around 0.5%.

Lastly, we can turn to the highest category of earners in our analysis. Only four employees of armed forces charities have annual earnings over £150,000 per year. That’s less than 0.1% of all armed forces charities employees.

What to make of this?

As DSC have pointed out before, high pay isn’t necessarily unjustified. It typically reflects the challenges of the job: for example, running a large charity with thousands of employees and tens of thousands of volunteers.

Nevertheless, high pay among armed forces charities – especially in the top range seen above – is relatively rare.

It’s important to remember charities’ reporting requirements vary by income. Here, we have used the total number of employees (reported from £500,000 upwards) alongside data on high paid employees (reported from £10,000 upwards). This means that our estimates are, on balance, likely a bit too large.