Public backs charities building up reserves to see them through
difficult economic times
1 October 2009
Two separate surveys by
CAF Bank and the Association of Chief Executives of Voluntary
Organisations (ACEVO) on charity reserves have found that whilst a
majority of the public (58 percent) think charities should build up
reserves, five percent of charities hold no reserves at all and
nearly a quarter (24 percent) hold less than three months of annual
running costs in reserve. If the economic downturn lasts for
another 12 months 40 percent of charities estimate that they will
have less than three months of reserves.
ACEVO’s survey of over 2,000 members of the public reveals that
58 percent agree that charities should build up financial reserves
to see them through tough economic times, only 16 percent believe
they should not be doing so, while 20 percent did not express an
opinion.
CAF Bank’s research amongst 127, predominatly small and medium
sized, charities also reveals widespread differences in the levels
of financial reserves held by charities. Five percent hold no
reserves at all, nearly a quarter (24 percent) hold less than three
months of reserves, 20 percent of charities hold between four and
six months of reserves, and almost half (47 percent) hold more.
Two-fifths (43 percent) of charities say their levels of
reserves are lower than last year, according to the CAF Bank
survey. A similar proportion (42 percent) have increased their
reserves. Although most charities hold reserves in cash, some are
held in stocks and shares and these have been affected by falls in
the stock market.
Commenting on the results of the research, John Low, Chief
Executive of CAF said, “Charities have often been uncomfortable
talking to donors about reserves, so it is reassuring that there is
widespread understanding that well run charities need reserves.
“As we emerge from the recession charities should learn from
these difficult times and ask whether their reserves are sufficient
to keep vital services going in good times and bad.”
Stephen Bubb, Chief Executive of ACEVO said, “Whilst it is
encouraging for the sector to see that the public recognises the
need for charities to build up their reserves, I am concerned about
the number of organisations which could still run in to
difficulty.
“Despite reports of green shoots, we know that a continued
increase in demand for services provided by third sector
organisations in areas such as employment, counselling and debt
advice will put pressure on their finances for some time to
come.”
Notes to Editors
1. CAF’s online survey was responded to by 127 CAF Bank customer
charities.
2. ACEVO commissioned YouGov to conduct a poll of the public on
their perception of charities. The total sample size was 2,065
adults who completed the poll online.
3. The Charities Aid Foundation is a charity set up to help
other charities by working with donors, companies and charities to
encourage and facilitate a culture of giving. They do this by
offering products and services that make giving easier, tax
efficient and help charities to make the most of donations through
their banking and fundraising support services.
www.cafonline.org
4. ACEVO (Association of Chief Executives of Voluntary
Organisations www.acevo.org.uk) is the professional body
representing charity and not-for-profit sector chief executives in
the UK, with over 2,000 members. The broad not-for-profit sector
now employs the full-time equivalent of 1.5m staff, with a
collective annual turnover of £46bn. ACEVO is committed to
improving third sector leadership skills worldwide.
Media contact
CAF
James Ketchell
T: 0207 832 3014
E: jketchell@cafonline.org
ACEVO
Cariana McKeown
T: 0845 1304641
E: carina.mckeown@acevo.org.uk