The Impact of an Economic Slowdown on the VCS - Keith Hickey, CFDG

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This presentation explores some of the main implications that the current economic climate might have on the voluntary sector and highlights some strategic responses to deal with these. It is from a NCVO Third Sector Foresight seminar.

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The Impact of an Economic Slowdown on the VCS - Keith Hickey, CFDG

  1. 1. Charity Finance Directors’ Group <ul><li>NCVO Third Sector Foresight Seminar </li></ul><ul><li>The Impact of an Economic Slowdown on the VCS </li></ul><ul><li>Keith Hickey </li></ul><ul><li>Chief Executive </li></ul><ul><li>22 July 2008 </li></ul>
  2. 2. Introduction <ul><li>Economic background </li></ul><ul><li>Implications </li></ul><ul><li>Actions </li></ul><ul><li>Opportunities </li></ul><ul><li>Questions </li></ul><ul><li>Conclusions </li></ul>
  3. 3. Economic Implications <ul><li>Credit Crunch – bank lending and house building </li></ul><ul><li>Inflation – oil, utilities, transport, food </li></ul><ul><li>Falling Demand – M&S, John Lewis </li></ul><ul><li>Increased Unemployment </li></ul><ul><li>Current Account Deficit </li></ul>
  4. 4. Warning signs? <ul><li>A large and increasing current account deficit similar to the early 1990s </li></ul><ul><li>Financial balances: although the corporate sector is in surplus, public sector and households are running large deficits </li></ul><ul><li>Has the UK been living beyond its means? </li></ul>
  5. 5. Solutions <ul><li>Reduced government & consumer spending </li></ul><ul><li>-> Reduced Imports </li></ul><ul><li>-> Falling Pound & Reduced Growth </li></ul><ul><li>How Long (mid 70’s 3 years, early 90’s 7 years) </li></ul>
  6. 6. Implications <ul><li>Increased need </li></ul><ul><li>Higher costs </li></ul><ul><li>Reduced trading income </li></ul><ul><li>Difficulties with public sector contracts </li></ul><ul><li>Stagnation in individual giving </li></ul><ul><li>Legacies </li></ul><ul><li>Other </li></ul>
  7. 7. Actions <ul><li>Dynamics </li></ul><ul><li>Risk </li></ul><ul><li>Scenario planning </li></ul><ul><li>Investment & reserves policies </li></ul><ul><li>Cash flow management </li></ul><ul><li>Proactive </li></ul><ul><li>Stakeholder participation </li></ul><ul><li>Skill levels </li></ul>
  8. 8. Opportunities <ul><li>Brand </li></ul><ul><li>Accountability </li></ul><ul><li>Visibility </li></ul><ul><li>Invest </li></ul>
  9. 9. Questions <ul><li>Implications on your stakeholders? </li></ul><ul><li>Implications on employees & volunteers? </li></ul><ul><li>Will individual giving go up or down? </li></ul><ul><li>Will there be more charity failures and mergers? </li></ul><ul><li>What will happen to grant makers using total return? </li></ul><ul><li>What will happen to pensions? </li></ul><ul><li>What effect will a change in government have? </li></ul><ul><li>Will your suppliers still be there? </li></ul><ul><li>Will there be an increase in ‘intelligent’ donors? </li></ul><ul><li>What stories will the media be looking for? </li></ul><ul><li>Etc </li></ul>
  10. 10. Conclusions <ul><li>2 – 3 years of hard times </li></ul><ul><li>Squeeze on charities </li></ul><ul><li>Proactive decision making </li></ul><ul><li>Transparency, accountability & culture important </li></ul><ul><li>Invest in opportunities </li></ul>

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