The effects of the 'credit crunch' on the sector

The effects of the Credit Crunch on voluntary and community organisations

Initial analysis of latest State of the Sector figures (which took place in 2007) reveals that out of 400 organisations, over a quarter have in excess of £50k held in short term deposits. As the banking guarantee in the UK only covers deposits up to this value, this may put some organisations at risk. In addition, over £15million from these organisations is also held in investments.

This is only a small snapshot of the sector from our 2007 figures, however it does indicate the vulnerability some organisations may be in. In order to assess the full extent of the problems that the voluntary and community sector face in Northern Ireland, we need your help.

Please email your answers to the below questions:

• Do you have any accounts with Icelandic Banks? If you do, how much money is in the accounts?
• Have your levels of reserves or investment fallen significantly due to the financial crisis? If so, what kind of losses have you seen?
• Have you been affected by the financial crisis in other ways - ie loss of sponsorship or private sector support?
• Have you any other relevant issues that we need to be aware of?

Please contact gordon.mccullough@nicva.org to let us know your situation. We would be grateful for responses by 7 November.

We will fully respect your confidentiality as an organisation, and only use the information you give us to present a general picture of the issues faced by the voluntary sector, rather than highlighting particular organisations' circumstances.

Useful links:

Goldblatt McGuigan Accountants has pulled together a list of steps to help charities defend against the credit crunch.

Russell-Cooke solicitors have released a special update on charities and the credit crunch, giving some advice.

The Charity Commission has issued guidance on the Financial Services Compensation Scheme and on the Icelandic situation. The guidance applies to non-charities as well. "Financial Services Compensation Fund: What it means for charities": www.charitycommission.gov.uk/news/fincomp.asp

"Charities who have invested in Icelandic banks": www.charitycommission.gov.uk/news/ice.asp

The Charity Commission is asking all charities affected by the Icelandic crisis to contact enquiries@charitycommission.gsi.gov.uk so they can collate information.

For up to date statements by HM Treasury: www.hm-treasury.gov.uk

For up to date info from the Financial Services Compensation Scheme:www.fscs.org.uk/consumer/Latest_News/

NCVO, Charities Aid Foundation, Charity Finance Directors Group and ACEVO have issued a joint statement urging all charities affected by the Icelandic banks crisis to contact them so they can correlate information about who is affected. They will be negotiating with the Financial Services Authority, Ministry of Justice and the Treasury to try to ensure charity assets are protected in full. For more info see www.ncvo-vol.org.uk.