Wednesday, 3 December 2008

Charitable income in the UK

Documented trends hardly likely to be specific to just one country

In the ever harsher competitive struggle for resources Conductive Education worldwide has been looking largely towards three sources as its source of income:

  • to state funding (through local administrations and health systems),
  • to charities,
  • to the surplus wealth of individuals who can afford to buy some measure of a conductive experience for themselves.

Charity surveys

Here's some update on the second of these these sources, charity.

Charities in the UK are very closely monitored and perhaps present trends there might be of relevance to a wider audience. They have certainly made the international news this week through a release from Associated Press, by way of Monday’s European edition of the International Herald Tribune.

The British Red Cross has canceled its winter fundraising ball — and that's just the tip of the iceberg.

British charities are expecting a fundraising shortfall next year as corporations donate less, investments fall in value and fundraising costs rise during an economic downturn, a large survey published Monday found.

Britain is home to around 190,000 charities, including international ones like the poverty-fighting charity Oxfam and Cancer Research UK. Together, the country's charities raised a total of 47 billion pounds ($70 billion) over the 12 months through Dec. 1 for domestic and international causes… PricewaterhouseCoopers, the Institute of Fundraising and the Charity Finance Directors' Group surveyed 362 of these charities — and found that, big or small, all expect their incomes to fall and their costs to rise in 2009.

This morning’s edition saw a follow-up report, by Rebekah Curtis

…as a tighter-fisted public cuts down on donations and corporate partnerships fall by the wayside, charities are also beginning to lay employees off and turn away volunteers….

‘Charitable giving is...a luxury good in economic terms. I would expect charities to have a relatively hard time,' said Stephen Lea, an economic psychologist at the University of Exeter.

Three-quarters of charities believe income will remain stable or decrease in the next year, according to research from the Institute of Fundraising, the Charity Finance Directors' Group and PricewaterhouseCoopers. The survey of 362 charities showed 32 percent putting capital projects on hold, while 71 percent expect either no growth or lower income from corporations in the coming 12 months…

Nearly one-third of British charities cut jobs between Sept 2007 and Sept 2008 and slightly more than half limited staff pay increases, according to a survey carried out by the Charities Aid Foundation and the Association of Chief Executives of the Voluntary Sector.

Weathering the storm

The causes most likely to retain support are those focussed on children, followed by international emergency relief and medical research, according to a survey by consultants the Management Centre. ‘There are some kinds of expenditure that people conserve at all costs as they get poorer, and one of them is expenditure on children,’ said Lea, the psychologist at Exeter.

Many readers of Conductive World will have a particular concern for cerebral palsy, especially with respect to children. Is there perhaps ground for some comfort here.

Scope has already read the runes

As long as two month ago, by far the largest charity with a concern for cerebral palsy in England, Scope (formerly the Spastics Society), issued a press statement on its first defensive action.

Scope is to reduce its senior management team and introduce other cost-saving measures to minimise the impact of the worsening economic slowdown before it reaches its peak. … There will also be redundancies in several other back office departments as the organisation streamlines its administration and management functions. These changes will step up the pace of its existing financial improvement programme in order to stay ahead of the declining UK economy.

Scope, like most other organisations, is facing increasing running costs at a time when some of the charity’s key sources of income are in decline – namely a slow down of legacy income, a drop in investment value and delays in property sales - due to the current economic climate. The future impact of the “credit crunch” on fundraising income from public donations also remains uncertain.

Unlike many other charities, Scope does not have substantial financial reserves. It has decided to take action now to minimise the impact of the economic slowdown, which is widely predicted to worsen.

The charity is also undertaking other practical measures to reduce overheads, such as cutting non-essential expenditure and reviewing purchasing arrangements.

Scope currently has around 3,500 staff across England and Wales.

Across the board

I never thought that I would find either need or interest to go back to the charities press, but I have, to see a little more of what is happening to the broader range of charities, not just to mega-bodies like the Red Cross and Scope but also to the far, far larger number of small- and medium-sized charities that have carried much of the burden for establishing Conductive Education in the United Kingdom. So here I am, looking through Third Sector, the weekly magazine for charity managers.

Tomorrow I may have something more to share…

References

(2000) UK charities brace for 2009 fundraising shortfall, International Herald Tribune, 1 December
http://www.iht.com/articles/ap/2008/12/01/europe/EU-Britain-Charities-Hurting.php

Curtis, R. (2008) Charities no haven for laid-off bankers, International Herald Tribune, 3 December
http://www.iht.com/articles/reuters/2008/12/03/business/OUKBS-UK-FINANCIAL-BRITAIN-CHARITIES.php

Scope (2008) Changes at the top as Scope acts to beat worsening ‘credit crunch’ (press release), 2 October
http://www.scope.org.uk/cgi-bin/np/viewnews.cgi?id=1223034552

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