During the past month as we were putting together our newsletter we found out some interesting facts and figures about the investment side of the UK charity sector.  We’ve shared those in our newsletter but I wanted to devote a bit more space to them here.

You may have seen my blog “Recession, Whammes…Actions” on 25^th April where I mentioned the impact that the decline in investment income and gains was having on organisations requiring funding. 

The facts below show that overall total return for investments was down to 6.1% for the past year… but …the more interesting fact is that the larger charities and endowments were the main cause of the decline!  You might think that this was due to their holding £14 million in cash but nope, that’s not the case.  Proportionally the smaller charities held more cash than the larger charities. 

In fact, had the big boys managed their funds like the medium size charities they would have generated more income, and grown their capital to be just about in line with inflation for the past year.  

The third sector lost out to the tune of £1 billion in total because of the approach adopted by the larger charities.  Now in a time of need it seems strange to me that the big charities are not focusing more on what they can deliver in the short to medium term.  Let’s hope that their approach changes soon, as the sector can ill afford to lose another £1 billion!

Here’s what the sector might have done with additional £1 billion last year: 

• Retained 56,000 charity employees
• Increased much needed workforce by 7%
• Allocated 4% more on charity expenditure
• Funded 87,000 charities for the next four years
• Paid RBS bankers' bonuses!

 What would you have done with it?

Oh … and by the way, our clients have achieved on average better results than the sector, with less volatility – so at least we can say that we have helped in the past year!