How can grant-making help to combat low pay?

06 July 2015

John Hume, Chief Executive of People's Health Trust, on how grant making can help to combat low pay in the voluntary and community sector.

For us to become a Living Wage Employer was not the most difficult of tasks, as we had a relatively small team and worked in a serviced building managed by a Living Wage employer, says John Hume, Chief Executive, People's Health Trust.

The Living Wage is an hourly rate of pay, calculated to reflect the cost of living, currently set at £7.85 per hour across the UK and £9.15 in London. Across the UK one in five workers earns below the Living Wage and this has a huge impact on communities, not least because low pay is one of the key social determinants of health. 

Support for the Living Wage is growing fast. There are now thousands of employers paying the Living Wage to all directly employed and regular subcontracted staff, as part of the accreditation scheme operated by the Living Wage Foundation. The scheme has put millions of pounds into the pockets of low paid workers since launching in 2011.

Despite this, it is still a real challenge for many VCS organisations – in fact, less than 1% of UK charities have become accredited Living Wage employers.

It is especially tough for those organisations supported by People’s Health Trust: they are small and local organisations based in the top 30% most disadvantaged neighbourhoods in Great Britain.

That is why we are uniquely placed to support the take up of the Living Wage in the voluntary and community sector. We want to see the Living Wage become the norm, and believe that where organisations can pay it, they should.

For People's Health Trust becoming a Living Wage accredited employer was just the beginning. We then wanted to help our grantees to become Living Wage employers too. We committed to funding salaries at the minimum of the Living Wage, and worked with our grantees to implement this in flexible ways.

We piloted paying the Living Wage to grant-funded posts in 2013 and over this time, we noticed that jobs where the Living Wage was not paid tended to be play workers, childcare workers and administrative staff. It also tended to be part-time workers (and one could therefore assume, mainly women) who were most affected.

By ensuring that all posts were paid the Living Wage, we were supporting a higher standard of living for individuals and their families and were encouraging smaller organisations to feel more confident about requesting the Living Wage funding from other funders.

This led me to start thinking about the number of jobs supported by funding organisations across the UK and what would happen if all of the funding organisations decided to pay the Living Wage to all posts supported by their grants. (According to the Almanac figures for 2015 Trusts and Foundations give £4.6 billion in charitable grants.)

We wanted to help a movement to begin amongst funded organisations. So we gave our support to the Living Wage Foundation to help make that happen. We brought together other funders who were also keen to explore paying the Living Wage to grant-funded posts or who, like us, were already paying it.

We want the voluntary sector to lead the way by putting our values into practice and using our influence for good so, together with Comic Relief, Barrow Cadbury, Trust for London and Joseph Rowntree Foundation, we have developed the Living Wage Friendly Funder scheme.

The scheme, launched in June this year, provides a framework and recognition badge for funders that implement the Living Wage through their grant-making. Living Wage Friendly Funders support charities to pay the Living Wage to any grant-funded posts. The funders also become accredited employers themselves and help support grantee.

Although it seems like an easy piece of work, it comes with complexities; it’s a big and important internal and external commitment for any funder to undertake. It’s an even bigger commitment to social justice and walking the talk.

The Living Wage Friendly Funders group has developed some guidance and FAQs that are available at

A career in the voluntary and community sector should not mean accepting low pay; salaries that equal at least the Living Wage are just one way that together we can attract, retain and develop good staff in this sector, as well as impacting positively on millions of people.

We want to see the Living Wage become the norm in every sector, but the voluntary and community sector must lead the way.

We’re happy with where we have got to so far, but the real success comes when we have every UK funder signed up to supporting the Living Wage through its UK grant programmes.

We’re not exclusive – we’re a welcoming, expanding movement determined to end low-pay and its lifelong consequences. We hope you can join us.

John Hume - Chief Executive, People's Health Trust


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