Charities warned to expect risks on every front

25th November 2008


25 November 2008

Charities warned to expect risks on every front

"In this tough economic climate charity finance directors need to focus on their ultimate goal of advancing the provision of benefit, and the financial goal of achieving a structural general funds surplus. If finance directors do not have a plan for how they can achieve a structural surplus and their charity runs into trouble they could be found negligent by the Charity Commission." This was the message of Charles Nall, Corporate Services Director at The Children's Society and chair of CFDG, at CFDG's 2008 Risk Conference, aptly entitled, "Staying Alive". The conference was held on 18th November at the Royal College of Surgeons of England, and attracted over 170 delegates from across the sector.

Nall predicted that legacies would be down at least 20% in number and volume as well as suffering from the drop in the housing market, and that subscription and discretionary giving would also inevitably be down with three million expected to be unemployed and many in the UK in debt. But Nall also had positive advice on how to achieve a stronger income base. Alongside more traditional methods for boosting the value of current donors he suggested innovative techniques, such as recognising the commercial potential of charities' specialist Intellectual Property Rights and using technological innovation, such as a modelling new drugs or therapies for commercial production.

Also speaking at the conference was Dr. Martin Weale, Director of the National Institute of Economic and Social Research, who said that "the risks posed by the current economic crisis to charities finances will continue well into the new year and beyond." Dr. Weale predicted that not only will donations to charities drop in 2009, but endowment income is also likely to fall and charities should be careful of specific current risks around stock market investment. In more general terms, he suggested that thanks to tightening credit in recent weeks we are not now likely to see positive growth in real GDP until 2010.

The conference saw a wide variety of talks covering current and future risks for charities, including fundraising, costs in government contracts, high technology crime and climate change. Perhaps the most optimistic note was struck by Jo Coleman of Farrer & Co., who looked at the risks and the opportunities for charities who want to help one another. If your objects and powers allow you to help another charity and it is in the best interests of your charity to do so, then, she suggested, appropriate help at the right time can be extremely valuable to struggling charities.

The conference was kindly sponsored by PKF and Thomas Miller.

- Ends -
Notes to Editor:

1. The Charity Finance Directors' Group was set up in 1987 and is an umbrella group that specialises in helping charities to manage their finance-related functions. CFDG's 1,530 plus members are responsible for the finances of charities with a wide variety of income levels. Between them our members manage some £14.7 billion in charity income per year.

2. For more detail on CFDG and PKF's 7th Annual Risk Management Survey, please click here

3. PKF are a top-ten firm of accountants and business advisers who specialise in advising growing and entrepreneurial businesses, AIM and fully listed companies, and public and not-for-profit organisations.

4. The Thomas Miller Group is a specialist insurance service business, distinguished by the service it provides to clients. Its service to the voluntary sector is delivered through its insurance subsidiary, CODAL, and Thomas Miller Investment, its investment management subsidiary.

3. For further information on this conference please contact our Policy Team

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