Charity Management

“Investments are greatest source of charity income,” says Rathbones

10 October 2012

A recent poll by Rathbones’ shows charities receive the majority of their income from returns on investments, an outcome that runs contrary to research from the National Council for Voluntary Organisations (NCVO) suggesting that legacies, investments and fundraising all produced similar levels of income in 2009/2010

At their annual Charity Symposium held last month in central London, Rathbones, an investment manager for not-for-profit organisations, conducted a poll, asking delegates what their most significant source of income was; legacies, fundraising or investments.

No less than 61.1% of delegates stated that most of their income came from returns on investments, compared to just 25.7% citing fundraising as their principal means of funding. Only 12.4% receive their most significant financial support from legacies.

The survey outcomes presented by Rathbones run contrary to research from the National Council for Voluntary Organisations (NCVO) suggesting that legacies, investments and fundraising all produced similar levels of income in 2009/2010. NVCO reported that total voluntary sector investment income in the UK was £2.4bn, fund raising income was £2.2bn while legacy income was £1.8bn in 2009/2010. When asked at the Charity Symposium, 69.3% of those attending felt that this was not consistent with their experience.

Rathbones says it found that attitudes towards social investment were much more mixed. While 44.8% may consider incorporating social investment within their charity’s policy in future, some 27.6% did not anticipate doing so. An equal proportion was either undecided or required more information before making this decision.

When questioned about regulation of the charity sector, delegates reported that raising thresholds for charity registrations, reporting and increasing audit requirements were potentially having a negative impact: 44.8% felt this to be the case compared to 35.6% who expected these issues to have a positive effect. However, there was broad agreement that the Charities Act 2006 had had little impact on charities with 93.3% stating that it had had slight or no impact.

Ivo Clifton, Rathbones’ head of charities, said: “It is significant that charities list investments as their principal source of income rather than the more traditional channels of fundraising and legacies. This doubtless reflects the harsher economic climate facing donors. Equally, it underlines the important role an investment manager plays in working with a charity to understand its investment objectives and provide solutions tailored for the specific requirements of the not-for-profit sector.

“We believe that ultimately performance counts and 70% of those attending our annual Charities Symposium considered this to be a vital attribute. However, quality of service is also an important consideration for some 45.4% and we hope that our recent event demonstrates the more intangible areas of support we aim to provide our charity clients on an ongoing basis.”
 

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