Summit will look for a course through the financial turmoil

A charity summit is being hastily arranged for next month to discuss how voluntary organisations can respond to the current financial turmoil and the potential loss of millions of pounds in Icelandic banks.

Hepburn:  'best to be open'
Hepburn: 'best to be open'

Representative bodies the NCVO, Acevo, the Charities Aid Foundation and the Charity Finance Directors' Group announced the event on Monday.

The news came as the sector began a rearguard battle to recover cash lost in collapsed banks, including £230m invested by 99 charities in the UK arm of Icelandic bank Kaupthing Singer & Friedlander.

Further evidence of the impact of the credit crunch emerged yesterday as a Charity Commission survey showed that four in 10 charities have been hit by the economic downturn. "Charities will wonder how they are going to survive the current crisis while continuing to meet people's needs," said Dame Suzi Leather, chair of the commission.

A spokesman for the NCVO, which is hosting the summit on 24 November, said the event would "see what the extent of the damage is and map out ways forward".

Cats Protection, which has £11.2m deposited in Kaupthing Singer & Friedlander, is one of the few charities to have admitted losses. "We are deeply upset," said Peter Hepburn, chief executive of the charity. "It is devastating to find how much factors in the outside world can affect the sector."

He said Cats Protection, which had 16 per cent of its reserves in the failed bank, decided to be honest for the sake of its 7,000 volunteers. "It doesn't engender support or mutual trust if we keep secrets," he said.

In August, John Low, chief executive of the Charities Aid Foundation, urged Chancellor Alastair Darling to protect charity funds if a bank failed. He never received a reply. "Some serious consideration should have gone into it," said Low.

Low joined a delegation of five sector leaders to meet Treasury minister Paul Myners last week. Sector bodies are conducting a confidential survey of members to assess the size of the losses in Icelandic banks.

- See Editorial, page 12.

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