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

Charity Finance Directors’ Group
NCVO Third Sector Foresight Seminar
The Impact of an Economic Slowdown on the VCS
Keith Hickey
Chief Executive
22 July 2008

Introduction
Economic background
Implications
Actions
Opportunities
Questions
Conclusions

Economic Implications
Credit Crunch – bank lending and house building
Inflation – oil, utilities, transport, food
Falling Demand – M&S, John Lewis
Increased Unemployment
Current Account Deficit

Warning signs?
A large and increasing current account deficit similar to the early 1990s
Financial balances: although the corporate sector is in surplus, public sector and households are running large deficits
Has the UK been living beyond its means?

Solutions
Reduced government & consumer spending
-> Reduced Imports
-> Falling Pound & Reduced Growth
How Long (mid 70’s 3 years, early 90’s 7 years)

Implications
Increased need
Higher costs
Reduced trading income
Difficulties with public sector contracts
Stagnation in individual giving
Legacies
Other

Actions
Dynamics
Risk
Scenario planning
Investment & reserves policies
Cash flow management
Proactive
Stakeholder participation
Skill levels

Opportunities
Brand
Accountability
Visibility
Invest

Questions
Implications on your stakeholders?
Implications on employees & volunteers?
Will individual giving go up or down?
Will there be more charity failures and mergers?
What will happen to grant makers using total return?
What will happen to pensions?
What effect will a change in government have?
Will your suppliers still be there?
Will there be an increase in ‘intelligent’ donors?
What stories will the media be looking for?
Etc

Conclusions
2 – 3 years of hard times
Squeeze on charities
Proactive decision making
Transparency, accountability & culture important
Invest in opportunities

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

by NatalieW on Aug 05, 2008

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