Starter Salary Principles for Charities and Nonprofits

This guide encourages charities and nonprofits to consider, with intention, how they set salaries for the lowest paid in their organisation.

As a sector we should consider how we recognise professional skills and day to day responsibilities, as well as whether how we operate as an employer reflects our vision and values.

Introduction

Your feedback is warmly welcomed! Please get in touch at hello@peoplepurpose.co.uk

Differentiating a voluntary role from a paid one

The statutory minimum

“Your actions speak so loudly I cannot hear what you are saying.”

Ralph Waldo Emerson

Beyond the statutory minimum

Practical effects of a statutory minimum approach

Benefits to going beyond the statutory minimum

Funding considerations

Starter Salary Principles

References

Introduction

Pay principles tend to focus on concepts like fairness, transparency and value for money. They also tend to look broadly across the spectrum of pay, rather than focus on either the highest pay scales or the lowest (ACEVO, 2013; NCVO, 2025a).

This guide is intended to encourage charities, nonprofits and social purpose organisations to consider how they approach pay for people at the lowest salary levels.

It explores the potential risk of a baseline informed by the statutory minimum, and the prospective benefits from adopting the real living wage.

It also proposes a set of principles that organisations could adopt, which articulate the value and impact of paying above statutory minimum for starter salaries.

The description of ‘starter’ salaries aims to encompass the idea of ‘entry-level’ (as opposed to ‘junior’) roles, those without management responsibilities, as well as the starting point for all salaries as a baseline at your organisation.

Differentiating a voluntary role from a paid one

Many charities and nonprofits are run entirely by volunteers. Taking the leap to paying staff can be daunting.

People can feel nervous about using charitable funds to pay staff. This is likely due to media reporting on supposedly high salaries of senior executives, and misunderstandings about the role of “overhead” in charitable delivery (CAF, 2018).

Choosing to pay people low salaries to compensate out of a sense of concern is an illogical reaction.

There are several reasons why you would pay someone to do a job, rather than hope they will do it for free:

A contractual relationship, which means your organisation can commit to delivery at fixed times and with quality assurance. Volunteers cannot and should not be held to anything that looks like a ‘contract’.
Recognition of professional competence. Charitable delivery should be done well and recognised for being a professional (as opposed to voluntary) service.
To support ‘core’ service delivery and operations. As an organisation you should be held accountable for what you promise to deliver through funding. While volunteers are crucial, they are less reliable. Once promises have been made, it’s more likely you will need staff to deliver on them. This includes operational support such as fundraising, not just frontline delivery.
To widen access, since not everyone can afford to give their time unpaid.

The other side of the equation is whether your organisation has sufficient regular income to afford the leap to paid staff.

In making this calculation it is worth considering the wider implication of what you pay: the relative value in skills and motivation, rather than underselling the true cost of investing in professional staff.

The statutory minimum

Once you have identified that a role should be paid rather than voluntary, there is a statutory minimum that you’re expected to meet as an employer (UK Government, 2025). The numbers below are rates to be applied from April 2026.

Statutory National Minimum Wage (NMW) and apprenticeship rates

This is only for employees aged 20 or younger, or who are on apprenticeships.

For 18 to 20 year olds it’s £10.85 per hour:

For a 37.5 hour week, this is £21,157.50
Monthly take-home is around £1,562.75

For apprentices and 16 to 17 year olds it’s £8 per hour:

For a 37.5 hour week, this is £15,600
Monthly take-home is around £1,229.30

Statutory National Living Wage (NLW)

For those 21 and over, minimum wage is described as the ‘National Living Wage’.

For employees 21 and over it’s £12.71 per hour:

For a 37.5 hour week, this is £24,784.50
Monthly take-home is around £1,780.37

It is worth asking people whether their take-home pay is sufficient, not just for their basic needs but for their sense of wellbeing.

Beyond the statutory minimum

The ‘real’ Living Wage is calculated every year by the Living Wage Foundation (Living Wage Foundation, 2025). This calculation is made according to the cost of living, based on a basket of household goods and services. It also makes a differentiation for cost of living in London compared with the rest of the UK.

The real Living Wage is £13.45 per hour:

For a 37.5 hour week, this is £26,227.50
Monthly take-home is around £1,866.95

The real Living Wage for London is £14.80 per hour:

For a 37.5 hour week, this is £28,860
Monthly take-home is around £2,024

This could be considered a new ‘baseline’ minimum, with the option of considering whether an increase on the real Living Wage would have proportional benefits to the organisation.

There are now over 3,000 Living Wage accredited charities who commit to paying their staff, and third party employees like cleaners, the real Living Wage. In addition, over 80 Living Wage Funders are committed to supporting and enabling their grantees to pay grant-funded roles at the real Living Wage.

A 2022 analysis of Government data showed that one in eight charity jobs are paid at less than the real Living Wage (Living Wage Foundation, 2022).

Practical effects of a statutory minimum approach

The cost of living in the UK has increased hugely over the last 5 years. One of the impacts of higher interest rates has been an increase in mortgage costs, and a knock-on effect on the cost of privately renting. Food and utility bills have also gone up (Pittaway & Try, 2025).

It is hoped that having employment will protect people from the risks of poverty. However a survey in 2024 reported 23% of Londoners in employment were having to use a food bank once a week (Living Wage Foundation, 2024). This is detrimental not only to physical health, but mental wellbeing.

Each person’s situation is unique, so it is difficult to ascertain an ‘average’ for someone’s costs. That said, there are some people, based on their background and living situation, who are less vulnerable to higher costs and therefore more able to afford a lower salary.

What are the practical effects of paying people less than they can afford?

1. Inequitable and exclusive employment

Equity and inclusion policies set out how an organisation will treat everyone with respect, prevent discrimination, and ensure everyone has the opportunity to succeed.

Salary levels for the lowest paid in an organisation are fundamental to meeting this aim.

If a salary is too low, then it is discriminatory because it advantages those who can afford to be paid less.

This can look like:

People living rent- or mortgage-free. For example those able to live with their parent/s, or those without a mortgage. Not everyone comes from a background where they have access to a rent-free or mortgage-free lifestyle, particularly young adults, who cannot all be assumed to have the opportunity to live with their parent/s.
People with a security network that allows them to work for less. This could be a partner who earns more, or inherited wealth, or they may have earned enough for several years that they have the financial mattress to take a lower paid position.
People without caring responsibilities. There can be extra costs related to caring, from raising typical children to raising children - or even adult children - with additional needs. With the UK population living longer, these responsibilities now extend to costs related to looking after old parents.

As a 2022 report from Pro Bono Economics puts it: “people from more privileged backgrounds are more likely to both ‘get in’ and ‘get on’ within civil society. Systemic low pay risks further entrenching this position.” (Pro Bono Economics, 2022). Another 2022 report from the Living Wage Foundation stated that “low pay in the third sector is reinforcing inequality” (Living Wage Foundation, 2022).

If your organisation has an Equity and Inclusion policy, then it should include how remuneration at the lowest end of the pay scale contributes to being more equitable and inclusive.

2. Poor wellbeing and sense of value

Wellbeing is a complex and nuanced concept. It is both an antecedent for positive workplace experience and an outcome from positive workplace cultures.

Living precariously due to in-work poverty has a negative effect on wellbeing (Living Wage Foundation, 2025). This means that a salary insufficient to create a sense of stability will have longer term negative impacts on an employee’s wellbeing.

Another negative impact on wellbeing could stem from a sense of being less valued as an employee, as a result of being paid less.

Frontline roles that do not have management responsibility will often be paid at ‘starter’ salary levels. While these roles do have huge value because they’re so often how charitable outcomes and impact are achieved, their remuneration at the lowest level of the organisation suggests differently.

3. Issues with retention and recruitment

Paying poorly at starter levels can cost an organisation more in the long run due to costs of managing high voluntary turnover.

What this means in practice is that savings from paying lower starter salaries are lost to the cost of recruitment and staff absence.

This isn’t just an issue for individual organisations, it’s a challenge for the nonprofit sector as a whole.

In a 2015 survey of charities, 29% said that the low pay they were offering was likely a factor for why vacancies were hard to fill. Of these, only 6% increased the salaries to try and compensate (UK Commission for Employment and Skills, 2015).

Someone’s experience at the very beginning of their employment will stay with them. Paying better at the beginning is far more likely to lead to a positive relationship with staff than paying poorly and hoping they stay anyway.

Benefits to going beyond the statutory minimum

The obvious benefits of choosing to pay starter salaries at a higher rate are the reverse of the negative effects, that is:

More equitable and inclusive employment
Improved wellbeing and employees feeling valued
Improved retention and recruitment.

There are other benefits, which should be considered alongside these more practical ones.

1. Values-led leadership

Charities and nonprofits exist to have a positive effect on the world. They are constituted with the purpose of making change happen.

While funding is crucial to seeing this through, charitable organisations’ success is considered through the lens of impact rather than profitability.

Efficiency in delivering services is a good thing to aim for, but it should not be at the expense of paying staff what they need in order to thrive.

Imagine a scenario where someone who works for a foundation, that gives out millions to combat homelessness, is living on a friend’s sofa because they can’t afford to rent a room.

Or someone who works frontline at a foodbank relies on a foodbank themselves.

These are extreme examples, but they speak to the holistic nature of values-led leadership, where how you do things is as important as what you achieve.

2. Respect for the frontline

In many careers promotion moves people further from the work that they love.

Teachers move further from the classroom the higher up the management ladder they go. Doctors spend more time in meetings than wardrooms.

Not everyone wants to be a manager. And many people who are managers probably shouldn’t be (Beck and Harter, 2014).

The hierarchical structures of most charities value ambition by rewarding it with better pay. Guidance around setting salaries speak to the idea that jobs with more “responsibility” should be paid more (NCVO, 2025a).

The nature of responsibility in the context of charitable delivery is one that deserves deeper consideration than simply management responsibility. This includes how much an organisation values the responsibility of frontline and administrative workers, and reflects that in their pay.

3. Collaboration not competition

As a sector we are all pushing towards a better future, but the free market forces of competition discourage collaboration. Competition for the best people pits one cause against another.

Similarly, treating starter salaries as a race to the bottom sets up a structure where people are expected to graft for less early on, to reap greater rewards later.

The majority of the 170,000 registered charities in England and Wales have fewer than 50 employees, and of these a quarter have fewer than 10 (NCVO, 2024). This means that internal promotions are less available than they might be in other sectors.

By having a more consistent approach to starter salaries across the sector, organisations can attract people with a particular interest in supporting that change they want to see, rather than salaries being a barrier to entry.

Funding considerations

Charities and nonprofits generally rely on fundraising to pay staff salaries.

Fundraising is not like sales, where customers pay a surplus on a product or service that meets a need.

Rather, fundraising connects individuals and institutions with an aspiration they choose to support.

These individuals and institutions want to know their support is being used well. This does not equate to “cheap”.

When a customer buys a cheap t-shirt, they may be aware that someone somewhere is being exploited. However, in that moment they are willing to embrace a bargain rather than feel confronted by a corrupt supply chain.

When a donor supports a charity, they are less connected with the concept of profit and loss. Their donation is one part of a larger whole. While some charities may suggest a shopping list e.g. “£5 could pay for a mosquito net”, this is an illustration to connect them with impact, rather than a product they’re buying for themselves.

Charities and nonprofits aren’t expected to be exploiting people. If anything, it’s the opposite.

In their 2022 report, the Living Wage Foundation found that 78% of those surveyed thought all directly employed staff and third party staff operating within the third sector should be paid the real Living Wage (Living Wage Foundation, 2022).

People misunderstand what charities do and how they operate (NPC, 2016; Charity Commission, 2016). While larger salaries for executive roles might garner negative attention, statutory pay for frontline roles could also be considered poor practice. A charity that exists to have a positive effect on the world might consider how their treatment of the lowest paid speaks to this aim.

As a sector we have an opportunity to explain the value of what we do, the professionalism required to work towards a better world.

In 2024 62% of charities reported that they do not receive the full value it costs for delivering government contracts (NPC, 2024).

This means that the general public is paying twice for services provided by charities: once in taxes and again in donations.

The underselling of our professional skills is endemic and deserves to be challenged. This starts with the lowest salaries we pay our people.

The statutory minimum suggests the lowest level of skill and ability. Is this the message we want to give not only those who work for us, but those who donate to our cause?