Charities 'face tough decisions' to survive

Published on Saturday 21 February 2009 12:47

CHARITIES will have to make harsh decisions that may go against their principles to ensure they are fit and lean enough to survive the recession, a financial expert on the sector will warn this week.

Jandy Stevenson, partner and leader of the charity team at Henderson Loggie accountancy firm in Edinburgh,

will make her comments at a seminar on Tuesday entitled 'Managing your charity through the credit crunch', jointly hosted by Henderson Loggie and law firm Turcan Connell. Speaking ahead of the seminar, she said chief executives, senior managers and trustees representing a wide range of charities would be taking close heed of the advice being offered.

"Charities can use the months and perhaps years of this recession to become more focused and efficient in the services they provide. It will stand them in good stead if, when they apply to trusts for funding, they are 100% clear how they intend to spend the money."

She added that many charities are staring a decrease in funding in the face as well as extra demands on their services. They will have to consider any legal and financial plans in detail to ensure they survive the economic downturn.

Simon Mackintosh, partner and head of Turcan Connell's charity unit, warned that a major challenge facing charities is the increasing burden of regulation.

In difficult economic conditions, he said, charities should closely examine the performance of their investments, whether they can continue to employ as many staff and the impact of any reduction in donations.

"Charity trustees need to understand the early warning signs and know how to respond," he said.

A number of charities have been forced to make job cuts, including the NSPCC and Shelter. Research has found than one in three charities expects to lay off more staff in the coming months.