New Report Outlines Major Fundraising Challenge to Charities During Recession

While most sectors of the economy are suffering a downturn in sales of products and services, Irish charities are experiencing a significant surge in demand. A new report from the Centre for Nonprofit Management in Trinity College Dublin paints a gloomy picture of charities' expectations for 2009, regarding both demand on their services and projected income.

Things can only have gotten more difficult since the survey was undertaken in early February of this year.

While almost three-quarters (74.9pc) of responding charities believed demand for their services would increase this year, almost two-thirds (64pc) expected a decrease in overall income in 2009.

The vast majority (85pc) of charities feel threatened, with the risks including "the possibility that organisations would either downsize . . . or cease to exist as a result of the economic situation".

For organisations like St Vincent de Paul, the dramatic recent increase in unemployment has meant a corresponding jump in requests for support, ranging from heating and lighting to First Communion bills.

If charities are unlike business, in finding more people coming through their doors, they are very much at one with the rest of the economy in suffering increased pressure on income.

Earlier this month, the Alzheimer Society reported that income for its main annual fundraising event was down by 20pc. The future viability of the charity sector is of vital importance both for society and the State's fiscal and economic planning.

Charities provide specific supports that complement state services or fill gaps where the State cannot or does not make adequate provision.

They tend to be cost-effective and refreshingly non-bureaucratic in fulfilling this role.

If, for instance, St Vincent de Paul cannot, in its quiet way, pay the back-to-school, heating or other emergency bills for the many thousands of newly unemployed families when the days begin to shorten again, the burden will inevitably transfer to the Exchequer.

Administrative costs, appeals and application processing delays will arise, adding to the strain on government finances and increasing still further the pressure on many families.

The Trinity report reveals that the majority of charities here are planning to increase their fundraising efforts in 2009.

Charities already report an increase in people volunteering their services. This ties in with significant anecdotal evidence, at home and abroad, that, in times like these, those who "have" recognise the need to support those who don't.

Charities say government policy must respond to these positive indicators by incentivising independent fundraising by the sector. It must send a signal to the general public, to companies, and to those with wealth that "Giving is Good", not relatively, but absolutely.

In many respects charities raise funds at present with one hand tied behind their backs. Tax relief on donations is topped and tailed. Those making a large donation, and those who can afford to give just a little, find that tax relief is restricted. This is a levy on giving.

Charities cannot reclaim VAT. The VAT bill of the Irish Cancer Society, for instance, would more than pay the cost of its Freephone Cancer Helpline.

St Vincent de Paul, pays over €3m in VAT each year, on everything from essential operating costs to promoting their Christmas collection.

The Danish government recently completed such a process over an 18-month period and the UK government announced a cash injection for British charities last February.

The Irish Charities Tax Reform Group believes that now is the time for a serious dialogue between the Department of Finance and the charity sector to tease out and agree measures to boost independent fundraising and philanthropy.

Original source: Irish Independent

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