The need for income is the primary concern for charities in the West at a time when demand for services and support continues to grow while public sources of funding fall.
South West charities are, however, confident that they can generate the income needed to continue to make grants or provide services and to meet their charitable objectives.
That is the message from a survey of 50 charity leaders and trustees conducted by the investment management firm Brewin Dolphin at its annual West of England charities conference, held jointly with Triodos Bank and law firm Burton Sweet.
The headline findings from the Brewin Dolphin survey of South West charities found:
- 85 percent of South West charities say the need for income is their primary concern.
- The risk of lower interest rates, an economy falling into recession and increasing regulation are also concerns.
- 50 percent of charities are confident or very confident in their ability to generate the income needed to meet charitable objectives.
- 40 percent of charities site low growth and interest rates as the biggest threat to their investments.
- 80 percent of charities are confident that their trustees have a high level of financial and investment knowledge.
Ruth Murphy, head of charities at Brewin Dolphin said: “The pressure on charities today is tremendous.
"Service providing charities are having public sources of funding cut and are increasingly reliant on donations and their invested funds as demand for their services soars.
“Grant-making charities may find themselves in a slightly better position in that they can scale down the size or number of grants they make but are worried about market volatility.
"They are reliant on a stable and growing economy, and stability and certainty are in short supply.”
“Our survey of South West charities also shows that they are well prepared and confident in their ability to generate the funds needed.
"Trustees are well informed and knowledgeable about the regulations and their responsibilities surrounding the management and investment of their charity’s funds.”
All charities working with an appointed discretionary fund manager to make and manage investment decisions must publish an investment policy statement every year.
An investment policy statement is usually included in a charity’s annual report and accounts.
Ruth said: “Twenty percent of those charities we surveyed said that they do not have an investment policy statement, which is concerning.
"Of those that do, 55 percent leave its preparation to their trustees, 20 percent leaving its dedicated investment sub-committee to prepare it, with a further 20% delegating to their investment managers.”
In October 2017, Brewin Dolphin published a more detailed national study of charity funds published in a report calledCharity Investment: What Matters Most.
That study found that 36 percent of charities in the UK held some form of investment portfolio. Of those invested charities, 67 percent cited income as their primary concern with 49 percent saying that low growth and low interest rates presented the most significant risk. Just under half (45 percent) had a dedicated investment committee.
The study also showed some 60 percent of UK charities with investments adopt an ethical investment policy, with 51 percent basing that policy on negative screening – taking the deliberate decision to avoid investment in companies that go counter to a charity’s purpose.