By Marina Ageyeva, Living Wage Foundation.
As the cost-of-living crisis continues, charity leaders face an increasingly challenging context. Leaders are responding to the ever-changing circumstances while supporting their end users through the crisis and bearing skyrocketing prices. In many contexts, donations are under pressure, the real value of incomes eroded by inflation, while organisations respond to an unprecedented need for their services. Many charities are now worried about their ability to deliver their crucial work. In addition, leaders of charity foundations and trusts are also concerned about falling income and asset values
Given these pressures, wages can seem like a sensitive subject to bring to boards. At the Living Wage Foundation, we hear that charity leaders broadly agree with paying staff a dignified wage that covers life’s necessities. However, budget realities often mean that real-time cost-of-living increases can be difficult to introduce.
The Living Wage campaign is an independent movement of businesses, organisations, and people who believe a hard day’s work deserves a fair day’s pay. The real Living Wage is an ethical benchmark for responsible pay that many employers choose to pay voluntarily.
The real Living Wage is the only rate independently calculated to account for life’s essentials. This includes the ability to respond to emergencies and save for a rainy day – a necessity which will be crucial for low-paid workers over the coming months.
Even before the cost-of-living crisis, charity leaders often had to overcome multiple barriers to paying the Living Wage. These included:
- Juggling long-term financial planning and the short-term nature of much funding.
- A resource-intensive fundraising cycle often leaves little space for staff development.
- A shift to the commissioning of services, which many organisations felt led to a ‘race to the bottom’ when applying for funding.
Nonetheless, over 3,000 charitable and third-sector organisations accredited as real Living Wage employers have been providing their low-paid employees with a year-on-year commitment to a wage that secures a dignified life.
Charity leaders champion the real Living Wage for a good reason: low pay is inextricably linked to many of the issues charities seek to solve. From mental and physical health to employability and inequality, in-work poverty continues to contribute to the multiple disadvantages that their organisations exist to address. Overcoming this contradiction in many organisations’ missions is vital to reaching their goals. We hear from many charity leaders and funders who are strong champions of paying their staff the real Living Wage in response to the cost-of-living crisis.
Data emphasises the importance of fair pay in the third sector. Recent research by the Living Wage Foundation highlighted the problem of low wages within the sector, showing that 14.1% are paid less than the real Living Wage. Crucially, this research demonstrated that low pay in the third sector exacerbates existing inequalities. For example, jobs held by women are more likely to be low-paid than men’s (16.6% compared to 10.3%). Equally, certain racialised groups face a heightened risk of low pay, as do disabled workers. The research is unequivocal: the real Living Wage must be at the heart of holistic solutions to these societal problems, including low pay and in-work poverty.
The landscape might be challenging, but charity leaders proved during previous crises, including most recently in their responses to Covid-19, that by working together we can overcome challenges to paying a fair wage.
The rapid growth of the real Living Wage movement, which has returned over £2bn to the pockets of over 400,000 workers, demonstrates the impact we can have when we work together. That’s why at the Living Wage Foundation we are working with over 60 Living Wage Funders to explore the drivers of low pay and jointly build a road map to addressing it. Tapping into the power of the network, Living Wage Funders can use their influence to champion the real Living Wage among their grantees and other stakeholders. Leaders at charitable foundations and trusts interested in finding innovative ways of supporting their grantees through the cost-of-living crisis and addressing working poverty are welcome to join the Living Wage Funders scheme.
The Living Wage Foundation is hosting a Living Wage Week event on Friday 18 November for funders working to end in-work poverty to explore responses to the cost-of-living crisis and practical steps funders can take to address low pay at this challenging time.
