Around a third of the 134 charities questioned – including a number of housing bodies – said they had been forced to cut their running costs after collapsing share prices hit the value of their investments and increased their insurance costs.
More than half said their "ability to meet their objectives" had been affected, with an average reduction in their assets of 17% between September 2001 and 2002.
A fifth said they had increased their fundraising, while others shifted investments to property, cash, bonds and hedge funds.
David Sinclair, policy officer of the Charity Finance Director's Group, said: "I have heard that because of the problems with insurance increases, some charities cannot continue to run." Charitable trusts had also seen the value of their investments plummet, affecting their ability to make grants, he said.
Anne McBride, trust and big gift manager for Centrepoint, said one trust that had previously given the youth homelessness charity £70,000 a year was now only able to give £50,000.
She said the charity was expanding its fundraising team to compensate.
Increased corporate donations and the new Supporting People support services funding regime would help to fill the gap, she added.
Gareth Morgan, financial controller of homelessness charity Shelter, said the value of its investments had fallen and that its insurance premiums had doubled over the past year. He said the value of the charity's investments had fallen by £100,000 in 2001 and £65,000 in 2002, and that it had projected a £250,000 drop for this year. He said: "These are quite serious sums of money which we can't really control on a year-by-year basis."
However, he said the charity would sit tight through the tough times: "If we sell [our shares], we realise that loss whereas if we hold there is a chance of them going up again."
Source
Housing Today
No comments yet