Insurance vital as recession hits charity donations
Charities
4th January 2010
As donations are hit by the current UK recession, Giles Insurance Brokers Ltd is reminding charities of the importance of having effective insurance from a specialist provider. The company, which has broad experience of insuring organisations in the third sector, explained that the uncertainty faced by such organisations highlights how vital it is to have cover against unforeseen circumstances that could make the situation worse.
The withdrawal or collapse of a large donor could significantly affect the finances of a charity, with many already suffering fiscally as a result of the value of their assets dropping or lower interest rates. A recent study of donations worth £1 million plus by Coutts & Co and the Centre for Philanthropy at the University of Kent showed that philanthropy at this rate remained "resilient" during 2007-08, with a fall of just six per cent in the number of people donating such amounts and most donors still keen to fulfill pledges. However, the total value of these sums fell 13 per cent during the year, as individuals and companies were affected by the global economic downturn.
Figures from Moneysupermarket.com may provide more hope for charities about their long-term prospects, as a survey discovered that despite the current recession, over half of British adults are still regularly giving cash to good causes. Total giving during 2008-09 fell by 11 per cent - or £1.3 billion - to £9.9 billion, but many people are still donating and are being more careful about where they allocate more limited resources in order to identify the way that suits them best.
Edgar Flaherty, a director of charity and care at Giles Insurance, advised: "With so many charities seeing falls in donations and their savings affected by the financial markets crisis, it is more important than ever that such organisations have protected their future and their work by taking out effective insurance cover, preferably through a broker with experience in the third sector.
"In addition to insurance to protect assets and guard against risk, such as a business interruption policy, charities may also require public liability insurance if they are responsible for the safety of others or buildings and contents cover for any premises."
Recommendations from the Charities Aid Foundation have been issued to encourage people to maximise their donations, including remembering to tick Gift Aid boxes to provide an additional 28p for every £1 in reclaimed tax for chosen causes, considering Give As You Earn donations directly from wages, donating shares to voluntary groups or opening a charity account.
With widespread experience of insuring charities, Giles is a specialist in the market and understands the specific needs of such organisations, which can require a range of policies and products to meet their needs and levels of exposure. Specific cover required by third sector groups can include protection against mistakes by trustees or the death of a patron, for bequeathed property and a fidelity guarantee.
