Investment banker warns "credit crunch will hit charities hard"
Howard Lake | 9 October 2008 | News
John Studzinski of the Blackstone Group, one of Britain’s top investment bankers and a major donor to charities, warned 1,000 charity leaders at a conference yesterday that “individuals will panic and reduce their donations as unemployment and economic recession increase.”
Delegates at Action Planning’s annual ‘Raising funds from the Rich’ conference in London heard from a range of Britain’s wealthiest philanthropists about the impact of the credit crunch on giving.
Studzinski forecasted that major donors and grant-making charitable trusts will cut their donations as their wealth and dividend incomes fall and that the decline in corporate support for the charity sector will be particularly marked.
He also expected that Governments across the world, faced with mounting budget deficits, would need to hold back on health and social welfare spending, reducing statutory funding to charities.
He encouraged charity leaders to focus on their core supporters to cope over the next two to three years. He commented that “your fair weather friends will melt away but, if you approach them appropriately, those who care most passionately about your work will stand by you and see you through this period.”
Now was the time to implement longer-term fundraising strategies, he said. “Glitzy dinners are out; they will need to give way to a focus on value for money and the outcomes you achieve. Honesty and transparency from charities will be vital in retaining support.”
“The real recession is just around the corner” he said. “This is going to be a tough period for charities but I think that we can learn a lot and emerge stronger.”
Other speakers at the conference included hedge fund magnate, Michael Hintze, and Richard Harvey, who gave up his role as CEO of insurance company Aviva to work as a charity volunteer in Africa.
www.actionplanning.co.uk
About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.