Tough times lie ahead for all our charities

With cuts looming, we need to become even more generous givers

By Leon Smith, September 2, 2010

Rosh Hashanah and Yom Kippur are traditionally a period when most of us are mindful of the need and obligation of tzedakah.

It may be that many of us who do not give throughout the year are moved to do so in the lead up to the Yomim Noraim but, as someone who runs a major charitable organisation, I can see only too clearly the need to focus on charitable giving throughout the year.

Our communal charities know that we are the fortunate beneficiaries of an incredibly generous Jewish community; however, the community's needs are significant and are only likely to increase. Charities exist to provide services that the state cannot or does not provide - particularly when it comes to the provision of specifically culturally sensitive services such as Jewish old people's homes. Yet it seems that the charitable sector is going to be expected to take on more and more of the financial burden.

Local authority support, even before the impact of the much talked about cuts, is already eroding year on year. For example, local authorities which provide care in communal care homes are, in many cases, not taking into account any annual cost-of-living increases. As it is, the local authority funding received by the care home does not cover the costs associated with any particular resident. The situation is likely to get worse with local government hints of "difficult times ahead".

Could this mean we are being softened up not merely for zero increases each year but possible decreases?

Bequests will fall as people will need to keep the cash for themselves

In the case of a charity, if the value of statutory income declines there is only one other place from which the money can come from - and that is in the form of charitable giving by the community. Is it reasonable to expect the community to carry on giving at ever-increasing levels? Unfortunately, this has been another case of "too little, too late" from the government. The increase in life expectancy has been a gradual and continuous trend over decades but little seems to have been done by central government to prepare for this.

An important source of income for many communal charities - though not one that can be budgeted for - is charitable bequests. Some charities have experienced a decline in the number of such bequests, and ultimately it is likely that the value of such legacies will also decrease. This is due to an increasing number of older people in the community and society at large who need the wealth they have accumulated to help support them throughout their much longer old age. Let us not forget that neither central nor local government will support anybody in care if they have more than the current cut-off level of £23,250. As this includes capital wealth, it affects the majority of our community.

Charities need to be aware of the difficult times ahead and be shaping up to cope with them. Our aim must be to reduce the shortfall between local authority funding and the true cost of running our charities. The New Year promises to be challenging for all our communal charities but our absolute priority must be to ensure that the exceptional quality of care we deliver to those in need is not compromised.

Leon Smith is the Chief Executive of Nightingale

Last updated: 3:32pm, January 5 2011