Charities warned on property mismanagement

Finance | Ian Allsop | 18 Jan 2008

New research has revealed that over half of finance directors in UK charities do not have a property strategy in place, risking potential underperformance and mismanagement of their valuable property assets.

The jointly commissioned survey by commercial property adviser Donaldsons and CFDG found that just a quarter (26 per cent) of charities had undertaken a review of their property holdings, and a further 15 per cent of those questioned said a review was pending.

However, there was limited evidence of forward planning in property decisions, with nearly half of respondents admitting that they take strategic decisions on property only when circumstances dictate.

The research also revealed that one third of respondents felt that their property is largely unsustainable in the long term (30 per cent) and around one fifth (18 per cent) felt they have the wrong sort of property.

Andrew Morgan, partner at Donaldsons, said: "The charity sector is under increasing pressure to minimise administration costs, so that funds can be allocated to the delivery of core services. After wages, property costs are the second largest incurred by most organisations and, without proper procedures in place, can escalate out of control."

He said the research showed that a significant number of UK charities are in danger of mismanaging their resources and may be missing out on cost savings obtainable from adopting a more strategic approach to property assets and liabilities.

Directory: Charity Finance Directors' Group (CFDG) | Donaldson's LLP

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