Expert view: Take a look at the long-term options

We may not technically be in a recession, but it is certainly starting to feel as if we are heading that way at breakneck speed.

Roller-coaster fluctuations in the FTSE and front page headlines in national newspapers such as "Financial crisis is worst for decades" are creating tremors of fear everywhere. Charities are not isolated from these financial changes.

Research shows that giving to charities is likely to plateau as the economy teeters. As a result, charities will need to be sharper and smarter in their fundraising, approaching donors for increased regular giving and making the most of tax breaks such as Gift Aid, which is taken up by only half of all charities in the UK. Those at the head of charities will be aware of the importance of nurturing relationships with all supporters over the next year.

And what about investments? "Don't panic" is the advice from stock market experts. Despite the fact that share values have tumbled to their lowest point for more than two years, the market is still 60 per cent higher than it was five years ago. Nobody can claim to accurately predict further falls, or rises, in the FTSE, but it is a timely reminder that equities are long-term investments. Reward comes with risk but also needs a strong nerve. Selling now will simply realise losses. A brave few may even consider buying in defensive sectors such as utilities and food retailers because bargains are to be had for those willing to take a long-term view.

This is the time to reflect on how diversified your investments are and consider how, over the next few years, you can spread your risk by investing in different asset classes. Excellent courses such as the London Business School's Foundation and Endowment Asset Management programme provide practical help and assistance in achieving this and learning from those who have already achieved a more diversified portfolio.

Charities may also be thinking of reverting to cash in these times of tempting rates. But remember - don't put all your eggs in one basket. Shop around for the best rates. Leaving large cash balances in low-interest high-street current accounts just doesn't make financial sense.

Key points

- The stock market is still 60 per cent higher than it was five years ago

- The Foundation and Endowment Asset Management programme teaches how to develop a diversified portfolio

- Charities should shop around for the best prices in cash funds

- Gill Nunn is director of charity financial services at the Charities Aid Foundation.

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