Original source:
Reduced values of investments and property legacies hit charities’ funding
Four of the UK’s largest medical charities have been badly hit by the recession and are considering cutting the amount of money they put towards lifesaving research.
Cancer Research UK, the British Heart Foundation (BHF), Leukemia Research and the Wellcome Trust may reduce funding for research into fatal diseases after the economic downturn wiped billions of pounds off their investments and caused donations to fall.
Cancer Research UK’s income from fundraising has been projected to have fallen by £17m in the past 12 months — the first time in its history that the charity has experienced falling revenues.
Last year it received £420m in donations, of which £333m was spent on research. This loss of funding is likely to affect work carried out at the charity’s London Research Institute, where the annual cost of running a lab is £900,000.
The BHF also expects its income to drop by up to £10m during the coming financial year, the first time in a decade its revenues have fallen. Last year, the charity spent 75 per cent of its £100m income on research projects.
The charity’s chief executive, Peter Hollins, said: ‘In common with most other UK charities, the BHF has been affected by the recent financial turmoil. The year ahead will be characterized by a cautious approach to maintaining investment across our prevention, care and research activities.’
Leukemia Research has experienced a £13m fall in the value of its investments as a result of the recession, and may cut its budget for new research by 25 per cent over the next 12 months to ensure the safety of existing projects.
Leukemia Research’s chief executive, Cathy Gilman, told The Independent that the financial crisis had forced the charity to be ‘more cautious’ about its new research commitments.
She said: ‘There are two distinct things for any charity — one is income, but the underlying thing is the value of your reserves, because that’s what determines whether or not the charity’s going to be solvent. The uncertainty about our investments does mean that we are more cautious with new commitments.’
The charity is committed to spending £67m on research over the next five years, but as it receives no government grants the fate of these projects depends on continuing public donations, which could dry up as the recession worsens.
‘The one thing that is certain is that this year there will be another 30,000 people diagnosed with the cancers we deal with,’ Ms Gilman said. ‘There is always an audience out there who want to support our work, it’s just really their ability to do that — we’ve got no idea to what degree that will be affected.’
The Wellcome Trust, the world’s largest medical research charity, saw £2bn wiped off the value of its investments by the end of October last year. It has already experienced a rise in the number of applications for research grants by scientists who had been turned away by other cash-strapped organizations. The competition for grants will intensify as the recession wears on.
The Wellcome Trust’s director, Sir Mark Walport, said: ‘There is no question that the investment environment is challenging. We aim to commit about £590m this year compared with £620m last year. We will continue to support the best researchers who have the best ideas.’
Figures published last week by the Charity Commission showed that more than half of all Britain’s charities were suffering as a result of the financial crisis, up from 38 per cent six months ago.
Cancer Research UK’s chief executive Harpal Kumar said: ‘The fall in the property market is having an impact on our legacy income stream and people may need to consider their level of personal giving. We are still well placed to deliver our strategy, and constantly vigilant of any risks.’
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