BUSINESS are being urged not to cut donations to charities amid fears that the economic downturn will mean a double blow for those in need.
Charities depending on trusts or foundations with stock market investments are likely to see a sharp fall in income at the same time as people reduce their giving because of the recession, according to chartered accountants Haines Watts.Directors David Green and Justin Crowley head the practice’s Newport not-for-profit team. HW was recently voted joint top in the UK for its charity expertise in a survey by industry magazine Charity Finance.
In Wales, the HW Newport centre advises more than 60 charities and housing associations. Clients include T Hafan, Tenovus, the Archdiocese of Cardiff and Llandaff and Newport Cathedrals.David Green, who has advised charities for 30 years, said many are pinning their hopes on the downturn fostering a new, less selfish approach in society where people become less materialistic and more caring.Mr Green, who has also been treasurer of Newport United Reform Church for 34 years, is one of only three Fellows of the Association of Charities Independent Examiners in Wales.“Research has shown there is indeed a link between fundraising levels and economic conditions, in particular personal income.
“We also know that there is a delayed effect – the biggest impact is likely to be felt by charities when the economy itself could be on the road to recovery,” he said.The 9,000 charities in Wales spent £982m last year. Although the biggest, such as the Arts Council for Wales and National Museum of Wales, receive public funding, the majority are much smaller concerns for whom continued voluntary giving is vital.Mr Green said: “Many trusts which help fund charities have considerable assets invested in the stock market and their portfolios will have fallen in value, reducing their ability to provide support.“There is also the worry that corporate donations will be cut as profits decline, notably in the manufacturing sector, which is always among the most generous. And while many people will continue to support their favourite organisations, they will be less likely to take on new causes.
”In a poll by the Charities Aid Foundation, 41% of “middle- class” people said they will in future place less emphasis on material possessions and pay more attention to social values.Mr Green added: “While nobody welcomes a recession, if it reminds people of the real value of giving and the difference it makes to people’s lives, then at least something good will emerge.”
by Aled Blake, Western Mail