2/20/2008 8:39:00 AM
FT 20 February
Charities' investment returns have fallen and "could be substantially improved" to boost income, the National Council for Voluntary Organisations will say today."General charities" - the bulk of the sector - earned a return of only 3.4 per cent on investment assets of £60bn in 2005-06, compared with almost 5 per cent in 2000-01. Large private schools with charitable status, which are under political pressure to increase their income to finance bursaries, earned only 3.9 per cent. In its annual almanac, published today, the NCVO will say "the investment strategies of charities could be substantially improved" and are "a potential source of increased income for the sector".However, it will also say that for the first time more than half of general charity income is "earned" from the sale of goods and services, adding that "many charities are becoming more entrepreneurial in response to the changing landscape in which the sector operates".Charities justify their unspectacular investment record by saying their hand-to-mouth existence necessitates conservative strategies.An official at an education charity that runs several schools said: "Typically charities take a low-risk approach and that's why returns might not be as high as Warren Buffett's. They want a guaranteed income to meet their objectives, so they can't have a 'feast or famine' attitude."Alison Cooper, deputy general secretary of the Independent Schools' Bursars Association, said school trustees "look to be careful in their investments, as any trustee of any charity should be". FT
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