Forty per cent of charities say their building is the greatest risk facing their organisation, according to a report published today by the Ethical Property Foundation, a charity that provides property advice to third sector organisations.
The report, Charity Property Matters: A national survey of current property issues in the charity sector, is based on a survey of 236 charities in England and Wales that were chosen to match the wider profile of the sector, and on further research, including in-depth interviews with representatives from infrastructure bodies, local authorities and front-line charities.
Among the biggest risks identified by respondents were rent rises, maintenance costs and the difficulty of getting funding to cover rent or mortgage payments and to pay for repairs, alteration and maintenance.
The report says that 10 per cent of charities had found rent and lease costs rising "unreasonably" in the past three years, 44 per cent had experienced unforeseen maintenance costs and 52 per cent of charities had experienced difficulties in obtaining funding for their premises.
The report says that 59 per cent of charities mainly owned the properties they used, 32 per cent mainly leased property and 9 per cent had other arrangements.
Meanwhile, 53 per cent of charities surveyed operated only one property and four occupied 99 or more. The report says this is likely to be representative of the sector as a whole.
The report says that 33 per cent of respondents have benefited from discounted rents. This is likely to underestimate the proportion of charities that receive discounts, because many respondents do not pay any rent.
However, local authorities, which make up 50 per cent of voluntary sector landlords, are becoming more likely to require charities to pay open market rates, the report says.
Of the charities surveyed, 69 per cent benefited from discretionary business rate relief, while 21 per cent did not. The remaining 10 per cent did not know.
Charities also face major problems getting advice on how to manage property assets, according to the report. It says that 45 per cent of respondents depended on informal advice to make property decisions, and only 37 per cent sought professional support.
"The survey found that many charities do not take a strategic approach to property, often because they lack the in-house expertise to appreciate or act on its significance," said Jo Taylor, director of the foundation.
"Typically, property issues will be addressed by a busy chief executive or trustee, rather than by a staff member with the necessary time and expertise. Yet the financial impact of property problems can be disproportionate for a charity.
"Handling of property issues by personnel with inadequate information diverts charities’ resources and time away from front-line services."
The research on which the report was based was conducted by the consultancy Campbell Tickell and was jointly commissioned by the foundation and the Charity Commission.