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Charities face cash crisis

Monday, Dec 24, 2012 - 02:31

Dec. 24 - One in six UK charities believe they may face closure in the coming year amid public spending cutbacks and falling donations from the public, according to a new poll of charities. Hayley Platt reports.

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Twenty months ago Craig Dunstan was unemployed and living rough. Now he has a roof over his head and regular work thanks to the UK homeless charity Emmaus. SOUNDBITE: Craig Dunstan, former homeless person, saying (English): "Without these I'd probably been back on the drink, probably even drugs or even in prison." Emmaus is one of the few charities in the UK that doesn't rely on government funding. It's become self-sufficient by restoring furniture donated furniture and then selling it in its own charity shops. It's a business model the government wants to see more of. They're calling for charities to become more entrepreneurial and less reliant on them. But Paul Rees from the Charities Aid Foundation says the government should be more protective. SOUNDBITE: Paul Rees, Executive Director, Charities Aid Foundation, saying (English): "Charities need the support of the government, of business and the public in order to keep going because we're in a very very tough economic climate and the situation is so bad that one in six of all charities fear that unless things improve they may face closure in the next 12 months." A report by CAF showed that last year the world became a less generous place. Among the bottom three least generous countries are Oman, Hong Kong and the Philippines. Australia, Ireland and Canada were in the top three givers. And 90% of those surveyed in Britain see raising cash as their greatest challenge. James Hayes, general manager at Emmaus, says charities need to be more creative. SOUNDBITE: James , Manager of Emmaus south Lambeth, saying (English): "What we don't want to see is a cut in services because already services are being reduced and reduced and its very difficult certainly for homless people and vulnerable people to find similar services that were out there two or three years ago." One alternative could be for charities to try their hand at investing in the financial markets. But IG's David Jones warns its not without risk. SOUNDBITE: David Jones, markets analyst, IG, saying (English): "The risk is you don't see the growth you're expecting, the bigger risk is that you get it completely wrong, markets nose dive over the next couple of years and suddenly your charitable pot that you were hoping to grow by maybe 10/15% a year could be drastically down, so I don't think it's a decision that any of them will take lightly." Emmaus says it won't be turning to the financial markets. Its business model works for them. But with many governments around the world pressing ahead with austerity measures, the new year may be a lot less charitable.

Charities face cash crisis

Monday, Dec 24, 2012 - 02:31

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