Offices for Charities - 3 Good Reasons to Ensure Price is NOT the Sole Criteria

It's been an interesting time to live in Toronto over the last few weeks. And today felt like the first real day of summer. So by the time I arrived at my second meeting today I was feeling more than a little cranky about our Mayor and not just a little bit overheated. Imagine my pleasure then to arrive in an oasis of cool bright space, with trees, lovely architecture and carefully designed areas that were both accessible and inviting. I felt calmer (and cooler) immediately...

All this in a space that houses a charity.

I've expressed before my concern over not spending enough on charitable infrastructure and "back of house" support, but clearly this is an organization that has had a great opportunity to afford a lovely space to pursue their Mission.

And then I worried that maybe it was "too rich", that Mission had suffered due to spending too much on the space. Maybe they would have been better off if their sole criteria in creating this space was to find the cheapest place at the cheapest price?

Here's why I don't think that's the case:

1. For-Profit organizations clearly believe that nice spaces help attract and retain talented staff. Charities need to attract and retain talented staff too, so while they may not need to be quite as fancy as Google's new home in Toronto, deciding on price only can't help morale either. And if better space has this positive affect on staff, imagine the value for the clients and patients this charity serves...
2. Productivity goes up when the work/office spaces are flexible, attractive, have the right tools and allow for appropriate privacy and quiet. So if charities are seeking to be as efficient as possible with donated money, increasing productivity makes sense.
3. Nicer space may actually make the Ask easier. Few prospects want to donate to renovate a tired Class C building to a bare minimum standard. But having seen the impact on people I was prospecting when I showed them the drawings of a truly remarkable renovation capital campaign I can attest to the value of dreaming bigger than just about rock bottom pricing!

Price will always be king. But perhaps more charities should take a page from the For Profit world and make aspiring to better working spaces nobility as well.

Salary Caps in the Charitable World

There's been a lot of noise in the last few days about salary caps for the leaders and senior executives of charities, and CBC in particular has been hosting call-in shows to debate the topic.

My sense is that there may be some need for oversight, but that in general charities are best left alone to manage salaries as they see fit.  The need for oversight and perhaps even some kind of limits is most obvious where public funds are being used in a significant way to support the charity.  I'm not talking about a little Trillium grant supporting a charity, but where a large portion of your (and my) tax dollars are at work it's simply bad optics to pay sky-high salaries to leaders no matter how skilled or experienced.

That said, many charities operate with little or no government support.  And they should set their own pay scales and pay bands.  In fairness that's what Board and Directors do, or they delegate to a Committee.  Hopefully they're mindful not only of the "bottom line" but also the public perception of what they're paying their Execitive Directior or CEO... We all remember the media frenzy a short while ago when a local large health-care charity paid a large sum to a departing CEO!

However, talent does come at a cost.  And large charities in particular have learned that running their $100 million plus sized organizations is at least as demanding than similar-sized organizations in the for-profit world, so you need to obtain and retain good talent... And that requires a fair wage.

Finally, there is one other ultimate arbiter of wages for charitable leaders: their donors.  While some donors may not be as informed as they should be in making their giving decisions it doesn't take too many articles or bad press to "scare off" donors, and the perception of "fat cat" leadership salaries will certainly sway donor thinking!

Thus, my contention is that in general most charities should be left to determine leadership compensation on their own.