Charity & Not for Profit

The current challenges faced by charities and not for profit organisations

All charity trustees have an important duty to protect the assets of their charity and to apply them properly to achieve the charitable purposes.  For many charities, the economic downturn has left them in a vulnerable position and potentially facing an insolvency situation or a need for restructuring as they struggle to meet escalating running costs and, additionally, suffer reduced income, both from grants and voluntary donations.

In many cases, the loss of voluntary donations will be instant, as cash-strapped donors limit their spending to essential purposes and hold off making donations until a more settled climate returns. Other sources of income will also disappear more quickly than the research suggests, as businesses reduce or cut costs that they do not consider "essential".

Given the variety of activities and volatility in sources of funds, many charities are facing financial uncertainty.  If a charity finds itself in financial difficulties, the risk of insolvency will be greater if the trustees do not take action to address the situation.

In turn, falling stock markets have eroded large sums out of charity pension funds and, when coupled with more stringent actuarial assumptions, have left some organisations facing increased pension deficits.

Understanding your needs

For most charities, overheads are relatively fixed, so a decline of income is instantly felt. We are working with a number of charities with pension deficits who need advice - and we expect to see more charities in financial difficulties over the coming months.

But, there are a range of solutions for any charity with pension deficit or funding issues that threaten to render them insolvent.

FRP Advisory has a team of specialists with in depth knowledge of the charity and not for profit sector.  We have advised a number of leading charities in dealing with cost/income challenges and pension deficits.

We understand the restraints that charities & not for profit organisations work under and the need to optimise every opportunity. 

Our message to all charities is that they should seek early guidance from expert advisers and charity restructuring specialists.

Our team continuously keeps up to date with developments in the Charity & Not for Profit sector so we can advise our clients accordingly, helping them to overcome any obstacles which may arise as a consequence of these developments.

Our services to the charity and not for profit sector

FRP Advisory offers a range of services to charities and not for profit organisations, including:

1. Strategic/options reviews
2. Restructuring advice
3. Formal insolvency advice

There are solutions to this all too common issue that allow a charity to avoid an insolvency process; however, a key factor in any successful outcome is recognition of the issue and seeking advice in a timely manner.

A case study - an example of the work we do

• The Work Foundation

Contact us

Our FRP Advisory charity and not for profit specialists offer a free financial health check. Contact us to find out more about how we can help you bring real value to the charity.