Insights from Italy – a pay cap formula for the Third Sector?
The annual conference of EUConsult (the European network of consultant to the not-for-profit sector) proved a wonderful opportunity for reflection, refreshment and learning, this time in the splendid surroundings of the Angelicum University in Rome.
Of particular interest was an update on the 2016 review of the Third Sector in Italy. Three points for the UK that I took away from this illuminating session were:
- Like the Brits, the Italians have struggled (and failed) to come up with a more imaginative term to describe their disparate collection of not-for-profit organisations than the ‘Third’ Sector.
- Quite a few of the Italian organisations lumped into their ‘Third Sector’ by the Government review were surprised (and often unhappy) to be included in this category – not least because of some of the new regulations that come with that (for example, see below!) And the UK ‘Third Sector’ might be quite surprised to see some of the types of organisations the Italians have decided to bring into that category. Which all goes to show how increasingly ‘fluid’ the formerly fairly clear demarcations are becoming.
- One of the above-mentioned regulations is particularly interesting, especially given the occasional media interest in the UK about “charity fat cats’ pay”. Under the new Italian regulations, the highest paid person in an organisation cannot be paid more than eight times the lowest paid person (full time equivalent). If there is a disparity, that can be addressed in one of two ways of course – reducing the top level of pay, or increasing the bottom level. Interesting stuff. Would that be an issue for your organisation? What difference might it make, and where?