Almost half of charities with a large amount of assets have sold properties or other assets in an attempt to generate income during the pandemic, according to new research.
The wealth management business James Hambro & Partners surveyed 100 senior executives of UK charities that have a minimum of £1m in investable assets in June and July this year.
Researchers found that 45 per cent of the charity leaders interviewed said they have sold assets such as property to generate income.
At the same time, 64 per cent of those with £1m of investable assets have had to sell or cash in investments during the pandemic due to a fall in income.
Nearly seven out of 10 of those surveyed said they did not expect income to return to pre-pandemic levels for at least six months, and eight per cent believe the charities they work for are at risk of closure within the next 12 months.
In addition, more than half reported that their income had fallen by more than 30 per cent since the start of the pandemic.
Patrick Trueman, portfolio manager at James Hambro & Partners, said: “For those charities with investment assets, not only are they important to their overall financial strength, they also provide a very important source of income to help them deliver on their charitable objectives.”
Trueman warned the end of furlough later this month was going to be a very challenging time for many charities.
He added: “The issue with selling an asset during a crisis is that it might not be the best time to sell, so it might not get the right price, despite providing a short-term solution to a charity’s financial position.
“Charities have been trying to weather a perfect storm of reduced income and increased demand and, although stock markets have risen since the early part of the pandemic, portfolios that were targeting high levels of income suffered as many dividends were cut or cancelled.”
The wealth management firm also commissioned additional research that surveyed 1,000 people which revealed that 36 per cent of donors have cut back on giving.
Research by trade body UK Finance, published earlier this month, suggested charities could be missing out on up to £50m in donations because individuals have held onto cash for three times longer than they did before the pandemic.