Nicholas Craig column

Oct 15 2004 By Nicholas Craig, The Journal

Norcare Limited, one of the region's most successful charities, is currently celebrating 20 years of its work in the North-East. It has been productive, targeted, and highly successful in fulfilling its goals, transforming thousands of people's lives as a result.

If Norcare was in the private sector we would be shouting from the rooftops about its excellent financial management and strong forecast. Norcare has adapted astutely to changing times and needs. However, as a third sector business, it is not recognised as the great regional resource it is.

We ignore too many excellent entrepreneurial businesses because they are charities, and are not seen as serious players.

The entire sector is, however, becoming sharper, slicker and faster because it is having to fight hard for its funding from government and the private sector.

Northumberland Day Hospice, the Great North Air Ambulance, the Community Foundation and many other North-East-based charities are not only doing a fantastic job, but are having to do it while major grants dwindle away.

A recent Community Foundation report predicts that grants to local charities will be slashed from £64m a year to just £10m by 2006 because of changes in government and European grants programmes. It's a horrific prospect that would floor many private sector businesses.

Instead, some charities are already employing entrepreneurial planning to create partnerships with business, pooling resources with other charities, and negotiating bank loans from charity-friendly lenders.

Our charities make a strong impact on the region. They deserve serious recognition, not only for the tremendous work they do, but the admirably astute way in which many of them now run their businesses.

Donations to the voluntary sector from the private sector provide only 5pc of its donated income. In the UK, 97pc of the total donated funds came from just 400 companies.

Charities cannot survive on the warm glow of altruism alone. The business sector and national government should find a method of providing core funding which would not change with political party colours or year-end corporate figures.

Until then, too many face an impending funding crisis which we are doing far too little to avert.

Nicholas Craig is a partner at Watson Burton LLP.