Irish News

Wednesday 23 July 2014

Top charities defend 'fat cat' CEO salaries

Published 19/08/2007|00:00

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TWO of Ireland's leading charities have denied they are mis-spending donated money by paying their senior management fat cat salaries, insisting they are "value for money".

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Away from the old image of ad-hoc charities, Goal and Concern are now operating internationally with multi-million-euro budgets with large staffs in Ireland, the UK and the US.

The denials come in the face of mounting questions over the practices of worldwide charities and the amounts of money involved, and particularly as the charities are operating in an unregulated market.

Since the advent of on-street fundraising, in which people agree to monthly contributions by direct debit, the budgets of such charities have soared. For example, last year alone Concern raised a staggering €122m.

Also, according to its latest figures, Goal raised so much money in 2005 that it was left with a whopping €16m surplus, leading to questions as to whether everything is in order in Irish charities.

The Sunday Independent has also learned that Concern, which delivers aid to over 30 countries, deliberately ran a budget deficit of €6m in 2006 and is expected to have a deficit of €15m this year, to reduce their substantial reserves which have fallen from a high of €50m to around €32m at the end of 2006.

On the salary front for example, Concern spent almost €13m on staffing costs alone and several of its key staff are on annual salaries in excess of €90,000. Chief Executive Tom Arnold is on a salary of just under €140,000, but insisted that he and others can justify their wages.

Mr Arnold is on secondment from the civil service and part of the deal to make him CEO was that his salary would mirror his civil service pay. Goal refused to disclose Mr O'Shea's salary but said he only became full-time CEO when the "workload became impossible to manage on a voluntary basis".

According to its annual report, Concern has just over 300 full-time staff but Mr Arnold insisted yesterday that the true number of employees around the world is closer to 4,000.

Speaking to the Sunday Independent, he said: "We have to pay the market rate to get top quality people. We need top people and if we weren't paying the going rate we wouldn't get them."

Jim Hynes, Concern's chief financial officer said, apart from Mr Arnold's salary, many of the other salaries are in fact behind the market rates. He said: "Many of our staff are on about €35,000 which is just about the average industrial wage."

On the reserves, Mr Hynes said: "We have to plan for long-term projects so we need to keep some money. However, because we get our money from the public, we can't be seen to be holding on to the money forever either. That's why we are running the deficits last year and this year."

In a statement to the Sunday Independent, Goal insisted that it is "lean and efficient organisation" which minimises its reliance on expensive expatriate staff. It said that its head office overhead costs never exceed 5 per cent of total expenditure.

Both Goal and Concern said that the monies in 2005 were much higher than normal because of the contributions made by the public in the wake of the Tsunami and the Pakistan earthquake.

Despite the high salaries being paid to their top people, they are minuscule to the kind of money being paid by the United Nations and Unicef to their top people. Many of the UN chiefs are on annual salaries of over €500,000 with some being paid close to a €1m a year.

The international NGO system has been criticised by a number of former aid volunteers who said that in many disaster locations, the aid agencies are often engaged in "turf wars" over who gets the best spot.

The Sunday Independent spoke to a number of volunteers who worked in Darfur, Asia and Pakistan who said that often the charities are "falling over themselves" in these disaster areas. "Often it is about the glory of being first in or being in the best/worst spot. It's surreal sometimes and the people who we are trying to help get lost in the mix," said one aid worker.

Tom Arnold acknowledged that in the wake of the Tsunami in south-east Asia this was the case, but he strongly denied it was the case in other areas, particularly in Darfur.

He said: "Everyone and their mother seemed to be in Asia after the Tsunami and the charities were tripping over each other. But many left soon after and only a few like Concern remained. However, in somewhere like Darfur, the opposite is the case. There are not enough NGOs."

Goal's John O' Shea echoed Mr Arnold's comments saying that his charity has been active in Darfur since the Eighties and said it is was proud to be "one of the first" to respond to the crisis.

In late 2004, the Sunday Independent exposed how, through on-street fundraising or "chugging", the budgets of the charities had exploded.

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