Investment 'will take biggest hit'

Survey predicts investment, corporate and legacy income to plummet

Investment, corporate and legacy income will be hit hardest during the recession, according to a survey published this week.

Managing in a Downturn, produced by the Institute of Fundraising, the Charity Finance Directors' Group and accountancy firm PricewaterhouseCoopers, looked at the effects of the economic downturn on the sector and how charities planned to react.

The accountancy firm concluded that there would be a £2.3bn shortfall in charity income in 2009 (Third Sector Online, 1 December).

A total of 71 per cent of the 362 respondents expected a reduction or no change in funding from trusts, the Big Lottery Fund and foundations. The same percentage expected no growth or a decline in corporate giving, with 37 per cent saying it was already affected and some already reporting a 50 per cent decrease. But 29 per cent said they expected growth in this area.

Small, medium and large charities had differing expectations of legacy donations. Forty-one per cent of large charities - with annual incomes of £10m or more - predicted a decline, compared with 4 per cent of small and medium-sized charities. Sixty-one per cent of small and medium charities said legacies would be static, compared with 40 per cent of large ones.

Income from shops had mixed predictions, with 43 per cent forecasting growth and the same proportion expecting no change. Forty per cent of small charities - with annual incomes of less than £1m - predicted growth of between 5 and 10 per cent, but only 7 per cent of respondents from large charities expected growth of more than 5 per cent.

Three-quarters of the respondents expected major donor income to fall or stay the same. The majority felt there would be no change in statutory funding and almost all said they expected investment income to decline.

Megan Pacey, director of policy and campaigns at the Institute of Fundraising, said it was surprising how much confidence organisations had shown in statutory funding given that government priorities were shifting.

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