Does Charity Relocation Guarantee Donors?

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Relocation can be problematic and complex for sensitive sectors, such as charities. With donations contributing to the majority of charity income, should relocation be considered when trying to maximise finances and attract donors?

With charities on the hunt for donor contributions, the notion of relocation is a growing option for many not-for-profit organisations. As the capital becomes increasingly expensive, many charities are looking elsewhere to house their organisations. Improved transport links and technology advancements make relocation a promising option, not least because they provide cost savings for many not-for-profit organisations. However, there are aspects that charities must be aware of before embarking on this journey. By law, charities buying or renting out property must ensure that it is in the best interest of the charity. All properties owned must contribute to achieving the charity‘s purpose and fulfilling its public benefit. According to the Charity Commission, all charity property must be suitable for the needs of the charity and be fairly priced or discounted: This includes competitive mortgage terms. More significantly, charities must be aware of any restrictions specified in their governing document that pertain to property.

Once the above is addressed it is then a matter of where to move to. London is the most popular location for charities and for good reason to. Research shows that a third of the UK’s largest charities are located in London, which yields 46% of the entire charity sector income and 63% in assets. With nearly half of the sector’s wealth based in the capital, and with 33% of all charity workers living in London or the South East, it is clear that London is the hub for charities. The above puts those in the sector in a difficult position as being based in London allows them to compete for better workers, but moving there and being based there is not going to be cheap.

According to research conducted by NfpSynergy with a sample of 1000 individuals, results show that 68% of people feel that charities who decide to relocate to London are being ‘somewhat’ or ‘very’ wasteful: Only 8% asked felt that relocating to London was worthwhile. The research goes on to say that charities would benefit more from an effective online presence and marketing practices. Furthermore, although London boasts the most income, research shows that different regions across England have broadly similar income therefore, a charity’s income potential is important when considering a move, but charities should also focus heavily on the effect the move will have on its business and its clients. E.g. Charities whose public benefit is based on helping those in London should probably stay in London and seek financial advice on cutting expenditure or have a small base in London and other properties elsewhere.

It is imperative for charities to understand the many elements of relocation, such as a charity’s strategy, its finances, its size and legislation. Each individual case is different and expert advice should always be sort prior to a move. If you wish to discuss your charities case, please contact me at suda.ratnam@raffingers-stuart.co.uk.