FINANCE NEWS: Market upturn boosts coffers, but talk of recovery premature

Mathew Little

The recent surge in the stock market has enabled charities to recoup around £3.3bn in the value of their equity investments, according to investment firm Close Wealth Management.

But charities are warning that after a three-year financial crisis they do not think they are out of the woods yet.

Close estimates charities have enjoyed a £3.3bn increase in the value of their investments since the end of March. But they are still worth some £5.3m less than they were at the beginning of January 2002 in the middle of the bear market.

Close chief executive Martin Smith commented: "Charities and voluntary organisations have benefited from the recent market rises but still have a long way to go to recoup the losses they have suffered over the past three years."

Norman Connor, finance director of the Stroke Association, said his charity had a long way to go to catch up after three consecutive years of investment losses.

"We also rely on legacies and fundraising. Those sources of income have been put under pressure by stock markets and property valuations. None of us can sit back and relax," Connor said.

Stephen Burgess, charities consultant at accountants Saffery Champness said: "While good news, it is premature to see this improvement in investment returns as an end to the recent financial problems of the sector.

"The few large charities with their own invested reserves may well breathe a sigh of relief but there is still a rocky road ahead for the majority that depend on grants, sponsorship and public donations."

Last year, David Bailey of Deutsche Asset Management said that it would take charities three years to completely recover losses incurred in the bear market.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Already registered?
Sign in
Follow us on:

Latest Jobs

RSS Feed

Third Sector Insight

Sponsored webcasts, surveys and expert reports from Third Sector partners


Expert Hub

Insurance advice from Markel

Charity property: could you be entitled to a huge VAT saving?

Charity property: could you be entitled to a huge VAT saving?

Partner Content: Presented By Third Sector promotion

When a property is being constructed, VAT is charged at the standard rate. But if you're a charity, health body, educational institution, housing association or finance house, the work may well fall into a category that justifies zero-rating - and you could make a massive saving

Third Sector Logo

Get our bulletins. Read more articles. Join a growing community of Third Sector professionals

Register now