NEWS IN FOCUS: Jobs fall victim to delayed rally in donor confidence

Annie Kelly

While the green shoots of recovery may be spreading across the commercial sector, the recent rash of redundancies indicate that charities are some way from feeling the trickle-down benefits.

Despite optimistic reports that the economy is inching along the road to recovery, the news that Help The Aged, RNIB and Carers UK are to make significant job cuts suggests that the outlook is still looking grim for many charities.

Help the Aged says it is making around 50 redundancies after failing to meet its fundraising targets. It says that the decision reflects the fact that it will end this year £6m short of the £75m it hoped to generate in voluntary income throughout 2003.

Steve Jones, director of marketing and communications, paints a gloomy picture of the state of affairs at the charity.

"Income just doesn't seem to be growing as we expected it to," he said.

"Although we've been pleased by our growth over the past six or seven years, we've been unable to match this over the past 12 months and don't expect it to get any better next year."

Legacy income falls

It's been a bad year for most of Help The Aged's different fundraising streams, but legacy income has taken a particularly bad beating. Jones admitted the charity is struggling to understand why.

"Legacy income is particularly below target this year and we can only really speculate on why this is the case," he said. "Maybe people aren't as financially confident as they were a couple of years ago. Another factor could be the high levels of personal debt that people are getting themselves into which could have an impact on legacies as well as regular giving."

Jones added that, due to the poor performance of the stock market, the overall value of legacies has fallen.

The stock market is also to blame for RNIB's second round of redundancies in 12 months. The charity laid off 100 staff in February after losing nearly a quarter of the value of its investments in the stock market slump.

The charity's pension fund was also hit by stock market losses.

A spokeswoman for the RNIB said that the current job losses, which could see the charity shedding around 40 posts in its community fundraising department, is part of an overall cost-cutting plan designed to close a funding gap of more than £6m between spending and income between 2003 to 2004.

'We've had to carefully assess the nature of all of our fundraising," she said. "We're becoming more strategic about the way that we do things from now on and we have to acknowledge that this is an area where we can struggle to make a real financial impact."

She says the RNIB wants to reorganise its community fundraising to attract more volunteers to fundraise without pay.

Both Help The Aged and RNIB are both trying to reassess their spending priorities in the face of a tough competitive market and falling public donations.

Smaller charities suffer

But Carers UK said its decision to cut seven full-time staff, a move which sparked the resignation of its chief executive Diana Whitworth, indicates the problems that medium-sized charities are facing in generating unrestricted funding.

"With us it certainly isn't a case of sitting down and thinking about where we're going - believe me, we do that all the time!" said Imelda Redmond, acting chief executive at Carers UK. "The job cuts reflect our never-ending struggle to get the necessary unrestricted funding to build up our infrastructure, which is the only thing that will allow us to grow and develop."

Redmond also blamed the difficulty that Carers UK and other medium-sized charities were having in trying to find good fundraisers to help boost voluntary income.

"It's difficult for smaller charities to recruit good fundraisers," she said. "It's a professional area that really needs developing if we're going to haul ourselves out of this financial slump."

But according to Les Jones, deputy chief executive at WWF-UK, the actions of all three charities will prove ultimately beneficial. He believes that when the going gets tough, decisive action has to be taken.

"Those charities that rely heavily on investments, legacy income or public donations are going to continue to struggle in this current climate," he said. "And this calls for a more businesslike approach to the way the charity is spending its money, which unfortunately can result in job losses."

Les Jones believes that a charity's main responsibility is to make the cuts in the most socially responsible way it can.

"Lots of people working in the sector are hugely motivated and emotionally identify with the cause. Consequently, they have huge expectations about the charity as an employer," he said. "It's vital that all staff are treated in a civilised and constructive way."

Steve Jones agrees, admitting that morale is "unsurprisingly low" at Help the Aged at present, but says that the charity is thinking carefully about ways to support those who may lose their jobs.

"It might be that we start supporting those staff we have to make redundant through our internal HR department as they try and find work elsewhere," he said. "We are aware of the need to be appreciative of all the work that they've done for us."

The long view

Despite attempts to soften the blow, a sudden flurry of redundancies damages morale and often the reputation of an organisation. Commercial companies tend to take a regular look at their staff base in order to avoid sudden waves of lay-offs.

Joe Saxton, co-founder of think-tank nfpSynergy, says that charities should think about doing this. He says: "Charities shy away from making regular cut-backs, but unfortunately that means when they do occur, it has a huge impact on staff morale."

"Redundancies, which are unfortunately part of life in commercial companies, simply aren't seen in the same light in the voluntary sector - I think that has to change."

A positive approach

However, Carers UK believes that charities should remain optimistic about the sector's ability to get back onto the road to economic recovery.

"The past few years have been tough and making redundancies was the last thing we wanted to do," said Redmond.

"But I do believe there is definitely light at the end of the tunnel," he says. "Some of the work we've done, such as changing our work practices, investing in some new areas and pulling back out of others, actually gives me the confidence that if we can ride out the next 12 months we'll be able to take the organisation and the cause forward again."

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