Low interest rates 'affecting charities'
Charities
22nd June 2009
Low interest rates are forcing many charities to use savings or reserves in order to deliver essential services, new data has indicated.
According to CAF Bank, 45 per cent of organisations polled had been forced to do so, weakening charity accounts at a time when many are seeing donations squeezed as a result of the recession.
Peter Mitchell, CAF Bank chief executive, explained that charities are "the latest innocent victims of the financial crisis" and called on them to seek a bank that does not "impose high charges", rather than "chasing nominal rates of interest".
The bank, a wholly-owned not-for-profit subsidiary of the Charities Aid Foundation (CAF), found that 17 per cent of charities had seen an increase in charges by their high street bank since the start of the downturn, while less than half (45 per cent) felt that their money was safer as a result of recent government policies.
A recent survey by the CAF found that 35 per cent of charities in the UK feel it is not clear what level of cover the Financial Services Compensation Scheme offers them.
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