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Charities lose faith and hope as funding crisis leaves them with £2.3bn black hole

Charities are facing a multi-billion pound black hole in their finances as companies withdraw sponsorship and individuals cancel standing orders as the economic downturn bites, according to an authoritative study published today. A survey of 362 charities by PriceWaterhouseCoopers, the Institute of Fundraising and the Charity Finance Directors' Group reveals that charity incomes are expected to fall in real terms and costs to rise. PwC estimates that the shortfall could reach £2.3bn next year as the UK heads towards recession.The forecast is the clearest sign yet of the crisis facing the charitable sector as a result of the credit crunch and has been met with warnings that charity services - often aimed at helping victims of financial hardship - will be curtailed, and some may even collapse.The squeeze has already seen the value of corporate donations tumble. The British Red Cross was forced to cancel its winter gala ball beside the Thames this month as it could not find a corporate sponsor for an event which usually raises £500,000. Shelter, the housing charity, lost £400,000 in the space of six weeks this autumn when corporate sponsors, including the nationalised mortgage lender Bradford & Bingley, cancelled donations.Charity chief executives will now press ministers further to release a £500m emergency fund to help see them through the slump. "There is no doubt that over the coming year we will see charities fail," said Stephen Bubb, director of the Association of Chief Executives of Voluntary Organisations. "We need help to help the victims of this recession."Demand for services which deal with homelessness and mental illness has grown at the same time as a fifth of charities report increased cancellations of direct debits by individual donors - often a bedrock of income. Of the charities surveyed, 71% said they expected corporate donations to fall or stay static over the next year, and a fifth of those feared they could lose at least 15% of corporate income. Some reported declines of up to 50% already.After a decade of strong growth in revenues, the value of legacies and wills - which account for a third of the income of UK charities - has also plunged, and the charities' investment income has collapsed in line with the equity markets. According to the survey, the only growth looks set to come from charity shops, as bargain hunters turn to second hand goods. Even that is threatened by a lack of goods to sell, as some would-be donors try to raise extra cash by selling their bric-a-brac online.This afternoon a group of 27 charities which have lost £46m in investments in Icelandic banks will lobby a creditors meeting for the release of their frozen assets. Among them are Cats Protection and the children's hospice Naomi House, which together invested £16.9m with Kaupthing Singer & Friedlander."In all but a technicality the recession is upon us and the economic climate is looking bleak," said Keith Hickey, chief executive of the Charity Finance Directors Group. "The one certainty is that our beneficiaries will need us more than ever. We must respond to this demand by ensuring that our charities are strongly led and able to ensure that we make the maximum possible use of resources."The crunch has come at a difficult time for Shelter, which offers advice on mortgage problems, homelessness, keeping warm and coping with rent arrears. Banking donors, who account for a third of corporate donations across the sector, pulled the plug on sponsorship deals as a rise in repossessions precipitated a 20% increase in demand for services. It had already laid off 30 staff."If the situation worsens there will be an impact on our services," said Adam Sampson, Shelter's chief executive. "It is the speed with which it has happened which has made it very difficult to adjust. We have to plan for a significant proportion of our loyal donors not being able to afford their five pounds a month standing order payments."Donations from the rich and legacies have slumped, according to the survey. Of charities polled, 86% expected legacies to either decline further or remain static over the coming year."Giving from rich individuals, which had been flagged up as the next big thing, has gone down the pan," Mark Astarita, director of fundraising at British Red Cross, said. "The bulk of the value of legacies is in property and shares, and their value has plummeted. We have predicted a 20% decline next year." That would wipe more than £3m off the charity's £100m annual income.Overall, however, the British Red Cross, believes its income will grow modestly next year, largely from monthly direct debit donations gathered through face-to-face fundraising."It is going to be tough, but it is not all doom and gloom," he said. "We are watching our individual donations closely and there is no detectable change."Short of fundsWith more than two-thirds of charity bosses believing corporate donations will fall or stay static in the next year, charities which rely on this stream of income will be under pressure.The Money Advice Trust, which provides free advice for individuals struggling with debts, relied on corporate donations for 65% of its £7.3m annual income in 2006-07. Five high street banks each gave it more than £500,000 in that year, including Royal Bank of Scotland, now nationalised.The Prince's Trust depends on the commercial largesse for around a fifth of its £22.5m fundraising income.Breast Cancer Care depended on corporate donations for 52.6% of its income, Breakthrough Breast Cancer, for 16.6% and the Royal Opera House for 16.1%.The crisis-hit UK financial sector accounts for around one third of UK charities' income from corporate donors. Figures from financial information group Caritas Data show RBS gave £57m in cash and kind last year, Barclays £52.4m and HSBC £50.7m.Voluntary sectorRecessionCredit crunchCharitable givingguardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds

Milestone for a prince whose life has been a waiting game

For many men, a 60th birthday is a time for reflection; a winding down of activities, handing over to the kids (passing on the family firm, perhaps), looking forward to retirement. Not so for the Prince of Wales, whose birthday it is today. All his life, since the age of three, he has been readied for the day when he will succeed his mother. It could happen maybe next week, maybe next year, maybe not for another 20 years. The Queen is fitter than her mother was at the same age, and she lived on to be 101.Abdication is not written into the royal DNA and so, barring accidents or long-term, incapacitating illness to the Queen, Charles also serves by only standing and waiting. He is already the oldest Prince of Wales and third-longest serving heir-apparent and, in another five years, he would be the oldest person to become king.Meanwhile, he is carrying on: last month there was a lengthy tour to east Asia (Japan, Brunei and Indonesia). This week, remembrance services in London and Verdun, dinner with the Sarkozys in Paris, receptions for insurers and a British Antarctic expedition and a comedy gala starring John Cleese, Robin Williams, Rowan Atkinson and Joan Rivers.Last night the Queen gave a private dinner for 170 guests at Buckingham Palace with the Philharmonia providing the music. Today will entail visits to Prince's Trust projects and a party at Highgrove, his country estate in Gloucestershire, where 75 close friends and celebrities will be serenaded by Rod Stewart. Apparently - and since it has been in the tabloids, the royal papers of record, it must be true - Camilla is planning to surprise him with 60 little gifts, one for every year of his life: a pair of walking boots, a personalised fishing rod, CD copies of the Goon Show, the sort of things any chap his age might relish. What else do you give a man with a £16m annual income from the Duchy of Cornwall's ancestral estates - 135,000 acres (54,521 hectares) spread across 23 counties - and a personal staff of 35?Charles may reflect that this milestone birthday should be more settled and satisfying than any for 30 years: 20 years ago he was in the midst of a marriage breakdown, 10 years ago he was reviled as the heartless, adulterous brute who had cast Princess Diana adrift. But now the turmoil is over: he has married the woman he loved all along, his sons are grown and tucked away in the armed services, his charities flourish and, mention it gently, some of his pet causes - the environment, organic farming, human-scale architecture, improving interfaith relations - no longer seem quite so wacky after all.One former palace adviser said: "He is in a much better place than he was five, certainly 10 years ago. He has moved towards the position of a king in waiting and there's a greater sensitivity to the public implications of his role. He used to rather enjoy going out on a limb and irking people to differentiate himself from the Queen, but I think he has realised that is not consistent with his role."And yet the moment for which his whole life has been a preparation eludes him. Robert Lacey, a historian and author, said: "I think he is finally coasting home, perhaps coming to the realisation that he will never be king or, if he does, he'll be like one of those elderly leaders at the end of the Soviet era - a sort of royal Andropov, with only a few years. His significance will lie in what he has accomplished as Prince and what he does to get the next king ready."Staff talk of a constant stream of handwritten notes - Charles, unlike his father and sister, does not generally use a computer - and of telephone calls worrying into the night. One who has worked for him for 20 years says: "He is computer illiterate so we get an unbelievable quantity of stuff. He spends an enormous amount of time writing notes: 'I have had a thought ...' followed by 10 pages in black ink. When you get your own memos back they are marked in red Pentel to suggest amendments. "In my area, I should think he spends 25 to 30 hours a week. It is micro-management: he has never learned to manage things. He rings up a lot but personally I try to discourage being called late."Senior advisers describe an ascetic lifestyle: one meal a day, working through lunch, and in the evenings on official papers. The money does not go on clothes, they say, pointing to frayed shirt cuffs and an overcoat he has had for years. There is wincing at mention of the famous allegation that Charles has a man to squeeze out his toothpaste for him - no, no, no, that was just once after he had broken his wrist. Jeremy Paxman's allegation that he has seven eggs boiled for him in the morning so he can choose the one best to his liking, is, alas, denied too: "Paxman got that third-hand," they say.As an alternative narrative, they cite the prince's compassion: the letters to relatives of servicemen killed in Iraq and Afghanistan, the visits to wounded troops in hospital and the invitations to the families of victims of crime, such as the parents of the girls murdered in Soham, to have tea with him at Clarence House. There are also issues he takes up: "If I don't raise it, who else will?" in all those letters that irked ministers a few years ago.And there are the causes, non-partisan but occasionally veering towards the deeply political: the environment, organic farming, modern architecture, education. The Liberal Democrat peer, Lord Taverne, complained in the Guardian recently that the prince should not make his views known, but if he kept his mouth shut, the complaint would be that he was vacuous or indolent. He knows he would not be able to do it if he becomes king, so he feels he must take the opportunity while he can. And he does feel very strongly in a conservative, old-fashioned way that the world is in danger of going to hell in a hand basket. Hence one of his most recent initiatives, conserving rain forests.His sense of noblesse oblige comes out in the Prince's Trust, the venture to help disadvantaged youngsters that he launched in 1976 in the face of official opposition - it really took off only during the unemployment years of the Thatcher government. Last year it supported 40,000 young people in training and helping them launch their own projects and companies.Martina Milburn, the trust's chief executive said: "He is particularly keen that we should work with disadvantaged young people. He'll say things like: are we accessible enough to young Muslims? He knows a lot more than people might think about what it's like to live on benefits, or to leave schools unable to read or write, because he speaks to people. He does not go for popular causes: it is not like we are raising money for cancer, animals or children."Charles's championing of organic farming is also now more than 25 years old, a cause taken up long before it became fashionable. Signs around Highgrove evangelically proclaim "This is a GM-Free Zone". Patrick Holden, director of the Soil Association and a long-term friend, says: "I think he has been totally outstanding. He's a global leader of the movement and he's not had the recognition he deserves. He runs one of the best organic farms in the country and, since he has travelled so much, he is in a better position than most to know what has been destroyed."He is very intuitive in the way he comes at things, ahead of the curve. He's been proved right and, if he feels something strongly, he doesn't let go easily. Thank God for the Prince of Wales. Who else is there? Even David Attenborough came later."Others take less kindly to his interventions. A senior teachers' leader expressed exasperation at the prince's occasional forays against declining standards in state education - on one occasion fulminating about the spelling and grammar of secretaries working for him, most of whom had turned out to have been privately educated. "I think he listens to people who would have a traditional view of education - the Chris Woodheads - and the rest of us generally ignore him. He does absolutely sod all for state education. I am pretty certain he doesn't often visit state schools though if you browse through Headmasters' Conference publications you will see quite a lot of pictures of royalty opening buildings."Or take Professor Edzard Ernst, the world's first professor of complementary medicine at the Peninsula Medical School attached to Exeter and Plymouth universities - a post created partly because of the prince's support of the discipline - who claims to have been harassed because of his scepticism about some treatments. Ernst says: "He took great interest when my chair was set up but I have only met him twice, to shake hands, for half a millisecond, not to have a dialogue. He stands for implementing complementary medicine at all costs, whereas I stand for therapies which can be proved by sound evidence."His influence and energy could be used so much better. As it is used now it is detrimental to progress. He has started a discipline but he doesn't seem to have any understanding of the need for evidence. I have repeatedly been told he cannot tolerate advice which is not 100% in line with his opinion ... I think his advisors are all sycophants."Or take some architects. Sunand Prasad, current president of the Royal Institute for British Architects, still winces at the "monstrous carbuncle" speech in 1984: "It was very wounding and not justified. It closed down debate and was destructive of individual careers," he said. "Everyone got cast into the same liberal mould. The prince has championed sustainability and stewardship of resources and it is fantastic that someone in his position should do so. But the debate has moved on: there's huge public interest in architecture, but people are buying modernist products, not classical ones."The prince is constrained in what he can say not just by the institution, but also by his background and inclinations. He has no real power, just the hope of wielding influence by what he says. When he does so and the columnists and newspaper-reading public merely snigger he finds it deeply frustrating. All very well, some say, for a prince - who has valets to pick up his discarded clothes - to tell others how they should live, how much space they need and what they should eat. It is particularly hard to tell those taking foreign holidays that they should fly less, given his chartered flights around the world and up and down Britain. Galling if you're a commuter squashed on a late, uncomfortable, rush-hour service to read of his use of the royal train, which costs thousands on the rare occasions it leaves the sidings: £18,916 for his jaunt from Gloucestershire to Cumbria last year to inaugurate a country pub project."He lives in a way most of us never could," one senior figure concedes. "But it goes with the job. It is a bit like criticising Gordon Brown for living in a tied house in central London." There is little denying that the prince's concept of real life is not quite as ordinary people's. Even those who have known him for years and count themselves as friends are deferential. Holden says: "I call him sir. I can see it's an anachronism but it is necessary to have protocols. If you demand respect based on birth, that's a sin, but I don't believe he does that."And then there is the media, with which his largely loathe-hate relationship has been mutual for many years. Understandable perhaps, given that the prince's whole life in every aspect, trivial and significant, has been lived so publicly - it is part of the job. But watch the prince on tour glaring at photographers or turning his head away - woe betide any hapless reporter trying to strike up a conversation or ask a question. There was that famous aside in 2005 at a press call during a skiing holiday when the BBC's Nicholas Witchell, one of the royal pack's most deferential correspondents, got both barrels: "These bloody people. I can't bear that man ... he's so awful." Such things get remembered and do him no favours when he has something he wants to say. Charles has been treated much worse by the tabloids, which took sides during the war with Diana, and have excoriated and mocked him ever since. "He is very thin-skinned. He knows all those 'dotty prince' headlines. He calls the Daily Mail the Daily Dementer," says an advisor. Holden's views are similar: "He is more thin-skinned than people realise, he feels issues are not taken seriously and his views are not heard. He is remarkably vulnerable and sensitive to criticism. And, it is quite hard to be told you are wrong, whoever you are." Two factors indicate new calm in Charles's life: his marriage three years ago and a household under more discipline than before. The days of spin doctoring and near-open briefings against other members of the royal family are past. His private secretary, the urbane Sir Michael Peat, and communications secretary, the former Financial Times reporter and Manchester United PR, Paddy Harverson, run a tight ship. Those who see him daily say the frustrated bouts of temper are less frequent and he is more content than before. There are still volcanic explosions and petulance, impatience and exasperation, but his wife has had a calming effect. "Charles and Camilla argue and fight a lot but they end up laughing," said Ingrid Seward, editor-in-chief of Majesty magazine. "Diana would go off and sulk for days, but these two have their fights and they're laughing 10 minutes later."Now he has given up polo, Charles's energy is expended on long walks around Balmoral and bouts of hedge-laying at his farm at Highgrove, a passion which his security men, enlisted to help, have to endure.Lacey said: "Curiously I think the Duchy Original brands are rather appropriate for him: widely available in Waitrose, expensive, good quality and slightly old-fashioned. I think that symbolises what he has made of his career."The prince's weekSundayPrince Charles (and most of the rest of the family) attended the Remembrance Day service at the Cenotaph, then went on to the Guards Chapel in his capacity as colonel of the Welsh Guards and laid another wreath at the Guards MemorialMondayCharles and Camilla attended a private dinner hosted by President Sarkozy at the Elysée Palace in ParisTuesdayAt Verdun for French ceremony marking the 90th anniversary of the end of the first world warWednesdayThe prince met insurance industry leaders at Clarence House, then as patron of The British Army Antarctic Expedition, was at a reception to thank supporters at the Old Royal Navy College, Greenwich. He and Camilla went on to attend the comedy gala, We Are Most Amused, and met the performers at the New Wimbledon TheatreThursdayAs founder of the Mutton Renaissance Campaign and Patron of The Academy of Culinary Arts, Charles received the first Renaissance Mutton of the season, from Cumbria, presented by butcher Andrew Sharp at Clarence House. Reception and private dinner at Buckingham Palace, with music by the Philharmonia FridayAt the launch of Youth Week meeting youngsters participating in The Prince's Trust Team Programme at Beckton Community Centre, London. Then, as president of the Prince's Foundation for Children and the Arts, attended a concert for nearly 200 children from schools across the country at the Royal Opera House, LondonSaturdayParty at Highgrove, the prince's country estate in Gloucestershire, that will host 75 guests including Meera Syal, Jilly Cooper and Edward Fox. Musical entertainment will be provided by Rod Stewart, who has waived his $1.85m (£1.26m) performance feePrince CharlesMonarchyguardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds

Royal Opera seeks northern base

The Royal Opera House could soon have a permanent second home in Manchester.