South West charities suffer a from economic downturn and the London Olympics

August 17, 2008

Individuals and companies are cutting charitable giving, while Lottery funds are being diverted from “good causes” to fund the London Olympics.

Charities in the South West face a “double-whammy” impact to their sources of income from the combined effect of economic downturn and the diversion of Lottery money from “good causes” to funding for the 2012 London Olympics.

These are the top-line findings of a survey of 85 South West based charities, conducted by the specialist charities & not-for-profit team at Bishop Fleming, the accountancy firm with the widest spread of offices throughout the region.

At a time when the nation has been glued to TV coverage of the Beijing Olympics, most South West charities have accepted that the 2012 London Olympics could be “bad news” for them.

More than two thirds (68 per cent) say that Lottery funding is being diverted from “good causes” to pay costs of the London Olympics.

A majority of South West charities (59.5 per cent) said that the UK’s economic downturn, with reports of rising inflation and mortgage costs, will force individuals to reduce their charitable contributions.

The same number believes that economic downturn will also force company boardrooms to focus on their own costs and reduce their charitable contributions.

According to Joe Scaife, lead partner for Bishop Fleming’s charities and not-for-profit team: “This is a challenging cocktail for charities that rely on individual and corporate donations, and funding from the National Lottery.

“More than a third of our respondents (38 per cent) confirmed that the National Lottery has been good for their charity by being a source of funding.  The diversion of Lottery proceeds to underpin the London Olympics is a blow at a time when the economic downturn is viewed as reducing contributions from both individuals and company boardrooms,” Mr Scaife said.

These “bad news” developments coincide with a view that Britain may be becoming less disposed towards charitable giving.

More than a third (34 per cent) of Bishop Fleming’s South West respondents said that Britons are now less likely to make charitable donations than a decade ago, and that charities are having to work harder to generate donations from both individuals and companies.

“Recent donation results for international disasters, like the Tsunami and Burma’s crisis, and the national TV ‘Children in Need’ and ‘Comedy Relief’ campaigns, would suggest that Britons are increasingly charity-minded. But the impact of economic downturn and Lottery-fund diversion to the Olympics are probably adding to an undercurrent of ‘charity starts at home’ mentality,” he added.

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