Living Wage Funders; Why Virgin Money Foundation are funding the Living Wage
Earlier this week I went for a drink with a friend who runs a homelessness project. He told me about a lad they have been supporting, a recent graduate who they got to know after his relationship ended and unable to afford the rent alone became street homeless. He didn’t have complex needs and he worked full time in a bar, but after each shift he slept in a night shelter because he couldn’t afford a flat.
The message is consistent and the issue pervasive – people are working and yet unable to escape poverty.
In work poverty is a problem across the UK and a reality for too many people. The voluntary sector sees the reality of this – people attending food banks because they cannot afford the grocery shop; mums choosing to feed their kids rather than themselves; people not being able to participate in community activity because of the cost of transport; evictions from the private rented sector rising due to rent arrears. The voluntary sector cares about poverty and the effect it has on people’s lives; speaks about it, ameliorates the effects of it.
Yet the sector is also a low payer.
On average charity employees receive almost a pound an hour less than employees in other sectors and 26% of charity workers earn less than the real Living Wage. This is particularly acute in the North East where the Virgin Money Foundation is based. The solution is not a simple one. The sector knows the importance of treating its staff well and of ensuring people have enough economically. However, it is often watching every pound, making difficult decisions about where to invest its resource. Raising salaries is one part of a bigger conversation about sustainability. The Virgin Money Foundation have decided to become a Living Wage Funder because we believe the conversation is an important one.
Too often, in part as a result of competitive tendering processes, voluntary sector organisations have felt pressurised to do more for less. To demonstrate exceptional value for money by driving down the costs of delivery, to compete on price. Becoming a Living Wage Funder is our way of saying ‘you don’t need to do this when coming to us for funding’. We will not look at the proportion of the grant being spent on salaries and ask if staff could do it for less. We will always want you to pay your staff a real living wage and if you aren’t then we will want to have a conversation with you about this. We know there will be situations in which an organisation cannot afford to change its pay structure and we fund organisations who have significant financial challenges, but in asking the question we open up the conversation and partner with charities on trying to change the landscape.