That led me to think about the lack of risk-taking in the charity sector compared with, say, the corporate sector. We've got into the swing of secured borrowing, which is a good start. But when was the last time your charity's trustees took a real bungee jump?
Often there is a gap between a trustee board's appetite for risk and a charity's need for financial return. Yet it is often the case that high returns require high risk. "Well, quite right," I hear you say. Donor money is held on trust and should not be gambled away, for sure - but are there other ways to approach this?
Of course, there are organisations such as the Charities Aid Foundation's Venturesome that are ahead of the game and do underwrite some charities' activities - but I was wondering about a direct link between donors and specific charity risks. For example, I was pleasantly surprised last year to hear a donor suggest that if he were to be approached to underwrite a charity taking a riskier investment strategy with its portfolio, such as a higher exposure to hedge funds, he would consider it seriously.
I wondered whether we couldn't expand this theory to the underwriting of many other areas of risk within the charity. Perhaps supporters could underwrite an area where they feel a particular affiliation, determined by their own area of expertise or interest - property dealers underwriting the risk of property transactions, marketing professionals underwriting the risk of a particularly daring appeal approach (if anyone is already doing this, please do let me know), or funeral parlours underwriting the legacy budget (well, perhaps not the last one).
Sharing the load
Perhaps from now on we can match every risk to a willing underwriter. In these credit crunch days, it may well be an attractive proposition to some supporters, who may be clutching the purse strings more tightly.
If that seems an unrealistic approach, perhaps an alternative would be the way Lloyd's of London underwrites shipping vessels: a large number of individuals each underwrite a fraction of the total. Mr X may not want to give you £10,000 this year, but he might be willing to underwrite 1 per cent of your legacy budget line.
- Helen Verney is finance director at Jewish Care