Expert view: Charities are the ones being crunched

By Elissa Bayer, May 14, 2009

Last week I was at a Charity Conference — both participating and listening to speakers — on “How Charities Should Survive in the Recession”. There was a panel of speakers covering all the professions and speakers from the charities themselves. One of the salient points was that the current environment allows people to rethink their whole agenda, not only cutting staff, but looking at pet projects which are either too expensive, or are not what the public want to buy into.

In the afternoon, there was an investment session covering a whole range of investments, including cash, bonds, equities and hedge funds.

Clearly, charities are even more challenged by the current environment as they are seeing a decline in donations and in income, but expenditure has to be looked at and demands in tough times continue to go up.

At the other end of the spectrum, the Sunday Times Rich List was recently issued and, as usual, some well known people were on it, in addition to names that nobody has ever heard of.

The list creates a mix of emotions — envy, unhappiness at not being included, and perhaps some relief at only being £100 million down from last year — when others on the list have been hit by so much more.

The markets at the moment continue to highlight diversity in our society as the FTSE 100 Index has risen by over 1,000 points this year and Barclays has shown a sixfold increase since the beginning of the year, which has benefited those who are brave enough to invest and those with cash.

Charities, amongst others, are still showing a loss on their Barclays shares if they have held them.

They are also faced with the fact that several of the shares of the leading financial institutions are significantly down in value and are not going to pay a dividend for at least the next two years, as highlighted by Lloyds last week, which announced some perfectly dreadful figures.

As always, there are winners, losers and those that even in adversity see an opportunity. No doubt you will be able to judge if you can see a green shoot or a full lawn.

Elissa Bayer is the director of private clients at Charles Stanley

Last updated: 11:56am, May 27 2009