Bill C-470, a private member’s bill introduced by Albina Guarnieri, would impose a suffocating $250,000 cap on executive salaries at charities. The bill, which has gone through second reading, is nothing short of ridiculous. If it ever passed, the leadership exodus that would eventually ensue would cripple Canada’s charitable sector. So much for being charitable. Our whole outlook on compensation in charity is in need of a serious re-imagination.
Do we wish to see the end of breast cancer in our lifetime? Would we like to see homelessness conquered in perhaps one of our major cities before we die? Would we like to see the day when no child has to worry about dying of leukemia? I know the perfect way to prevent any of these things from happening: Maintain our antiquated ideas about charity compensation.
But what if, in fact, we’re actually hurting the needy by restricting charity salaries?
On first blush, limits sound like a good idea, right? Keep those mercenaries from siphoning money away from good causes with their fat-cat salaries. That’s the populist spin the media throws on it. And it makes us feel good to think we’re defending all of the needy people who would otherwise get the money these greedy executives are being paid.
But what if, in fact, we’re actually hurting the needy by restricting charity salaries? What if it is the case – as it is with most of the rest of the economic world – that when you increase the amount of money you are willing to pay, you can recruit from a better talent pool, and if you recruit from a better talent pool, you can get leaders who can increase the amount of money being raised for the needy?
What we don’t realize is that the kinds of restrictions being proposed have a powerful negative effect. They create stark, mutually exclusive choices between doing well and doing good for the brightest young minds coming out of our best universities, law schools and business schools. As a result, tens of thousands of them – any one of whom might have made an enormous difference fighting social problems – march directly into the for-profit sector each year without even considering a career in charity, because they are unwilling to make the kind of lifelong economic sacrifice that the charity ethic requires of them. Their talents are lost to the needy forever and gained for a lifetime by the marketers of Budweiser, BMW and Botox. How is that smart?
And it’s not just bright young students we are keeping away. We think we are simply saying that any more than $250,000 is off limits to charity leaders. What we’re really saying is that any great leader who can command a salary in excess of $250,000 a year is off-limits to charity itself. It is nothing less than an economic apartheid that ends up giving every advantage to the for-profit sector.
Why, if we want to address the world’s most urgent suffering, would we remove financial incentive – the force that drives all economic activity in the world – from our toolbox? Are we to leave the eradication of suffering to saints? And what if there aren’t enough of them? Are we prepared to allow millions of people to go on suffering and dying because it offends our ethical sensibilities to pay people money to address these issues? What kind of ethic is that? Do we really believe it is of some comfort to a mother who just lost her son to starvation to know that at least no one made a million dollars in the failed effort to save him?
