Funders are coming together to challenge low pay in the charity sector

emma-kosminEmma Kosmin is a Programme Manager at the Living Wage Foundation.

This week Lloyds Bank Foundation joined the Living Wage Friendly Funder scheme, meaning that another £22m of annual charity sector funding has been aligned to the living wage.

They’ve joined a growing community of  funders, including Comic Relief, Trust for London, and the People’s Health Trust, that have come together to enable charities to pay the living wage.

The independent living wage – calculated annually according to the cost of living – is set at £8.25 an hour across the UK, with a higher rate of £9.40 in London. That compares to the government’s minimum wage (or National Living Wage) of £7.20.

Across the UK almost six million people (23% of the working population) are paid less than the living wage and this figure is growing year upon year. 29% of working women (compared with 18% of men) currently earn below the living wage. With gross hourly pay significantly lower in the voluntary sector, low pay is a real problem for charities.

Why pay the living wage?

Paying the living wage has significant business benefits and can help charities to be robust organisations as well as good employers. There are benefits for programme delivery – 75% of employees report increases in work quality as a result of receiving the living wage – as well as on recruitment, retention and staff morale.

For many people, earning the living wage means not having to work extra jobs; giving them time to be with their family, get involved in the community or get more rest. At the Living Wage Foundation we hear stories every day of people who are moved up to the living wage and are able to afford healthier food, leisure activities and little treats.

Paying the living wage is the right thing to do for our people, but it’s also the right thing for our sector. Employees are more likely to stay in jobs where they earn a wage that covers their basic cost of living. Improved staff retention and motivation can mean that crucial services are delivered to a higher standard and that talented people don’t have to leave the sector. It’s one way that we can put the fairness that we preach into practice.

What can you do?

By becoming a Living Wage Friendly Funder, grant-makers let applicants know that they would like to fund projects where any funded posts are paid at the living wage as a minimum. Charities are encouraged to put in bids at the living wage but – crucially – are not left out in the cold if they cannot pay living wage for any reason.

The scheme has been popular with funded organisations, who are supported to increase staff salaries and may also be able to get the wider business and brand benefits of being a Living Wage Employer.

As more funders – including corporates and local authorities – join the scheme, more charities will be supported to pay the living wage and get all the benefits of doing so. It’s a real win-win.

Our annual celebration – Living Wage Week – is coming up and kicks off on 31 October. You can find out more from the Living Wage Foundation.

Join in on twitter using #LivingWage and #FriendlyFunders.


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