The vast majority of charities would not consider borrowing money to cope with any fall in income during the recession, new research by CAF Bank has indicated.
The not-for-profit bank, which is an arm of the Charities Aid Foundation, found that 93 per cent of the 280 charities it surveyed had no plans to borrow in order to get through tough times. Seventy-eight per cent of respondents, all of them customers of the bank, said their need for loans had not increased in the past 12 months, even in light of the continuing economic recession.
Almost two-thirds - 63 per cent - said they did not think charities in general would resort to borrowing in the current climate.
Just under a half of respondents said they expected charities would sell assets or cash in investments rather than seek loans to cover cash-flow problems.
Mike Selman, chief operating officer of CAF Bank, said he was surprised by the results of the survey because charities were earning less and being asked to do more.