ANALYSIS: Charities vow to fight on during the PR downturn

The economic downturn has already taken its toll on some charities' ability to execute their PR objectives. But the sector at large remains remarkably upbeat, says Alastair Ray

The stock market hasn't been kind to anyone recently. Declining share prices and falling dividends have hit pensions, endowments, savings and most recently charities. The ability of two key bodies to campaign and act on issues they consider important is under threat from that most mundane of causes - not enough money.

Guide Dogs for the Blind has had to close its 15 residential training centres after reportedly losing £20m on the stock market, while the RSPCA has halved its regional press team as part of a £6m cost cutting drive. The charity had lost £8.8m in 2001 and £7m this year as the value of its portfolio dived.

The degree to which other charities could be affected varies. The Royal British Legion admits that it has been hit but insists this has not had a major impact on its work. 'The effect is certainly there but it hasn't affected our ability to assist the needy among the ex-service community,' says Jeremy Lillies, head of public affairs.

According to the Institute of Fundraising, the first casualties of a stock market fall are likely to be trusts, charitable bodies that rely either on current corporate profits or interest from investments.

For other charities, the first casually will be their reserves and corporate donations will also be reduced simply because there's less money in the Square Mile.

'Charities are not allowed to make profits but they are allowed to have a level of reserves. Many have found their reserves bashed,' says the Institute's CEO Lindsay Boswell.

The Charities Aid Foundation says that while charities are becoming concerned about the fall in the stock market, they are proving remarkably resilient in their ability to campaign for change.

'Many charities, although they are concerned about investments, haven't had to cut back on expenditure yet,' says senior marketing executive Ron Green.

The message, then, is that if the stock market doesn't recover the RSPCA and Guide Dogs for the Blind cuts could be just the start.

And yet equities are not their only source of income. Age Concern director of marketing and communications Neil Churchill points out that even in a recession the ability to run key campaigns is in a sense protected because some income streams remain surprisingly robust. 'Things like charity shops do well when the market's down. Quite a lot of charities are dependent on legacy income, which is more vulnerable to a decline in house prices,' he says.

The key question is whether any potential financial crisis could hit the ability of charities to both run relevant campaigns and to raise more money. And will it mean a search for cheaper communications options?

Cancer Research UK director of corporate affairs Jenny Grey says charities always look for the most cost-effective comms option, regardless of their financial position. And in any case cutting communications would undermine a charity's long-term future. 'It would be short-sighted to disinvest in communications,' she says. 'Communications safeguards future income.'

And it seems this message is getting through. Guide Dogs for the Blind communications director Robin Hutchinson insists his team hasn't been affected: 'At the moment we are protecting our communications budget.'

At the RSPCA, the precise impact of slashing the press team still isn't known. But head of press Ann Grain says the cutbacks are intended to allow the charity to continue work in its two key areas of campaigning and animal welfare. 'The idea is that we hope not to have to cut those two main areas of work,' she says.

Since much of the campaigning work is carried out by the national press office, this should be unaffected. Where regional press officers worked on major campaigns such as hunting and cat neutering, this will probably now be done by the national office. 'The strong stories will continue to get coverage - the smaller ones won't,' she says.

Hutchinson points out that charities, like their commercial counterparts, have to work with the current economic climate and some will adjust better than others: 'Those (charities) that have brand stability, those that have a good traditional support and loyalty will find it's easier to get through these times than those where the level of interest is more transitory.'

The National Council for Voluntary Organisations points out that the charitable sector has proved itself adept at maintaining its campaigning zeal despite straitened circumstances. Media officer James Georgalakis says: 'Charities are not that flimsy - they are not just going to fall over when their investments do not perform for a time.'

For now, the ability of charities to perform their key function - educating and informing the public about a given issue - seems secure. But comms bosses at the major bodies will be keeping a close eye on the experience of those suffering to maintain that position.

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