26 March 2015
A third of charities have not paid for any property advice in the past three years, according to a survey by the Ethical Property Foundation.
The Charity Property Matters Survey 2014 reported that 40 per cent of charities rely on informal advice from friends and contacts.
The survey also reports that 45 per cent of charities now consider that their property poses the greatest risk to their long-term survival, which is a 4 per cent rise on 2012 figures.
These may not be surprising figures, but they are certainly concerning. Antonia Swinson, director of the Ethical Property Foundation, says: "This survey paints a stark picture of a worried and hard-pressed third sector squeezed between fear and ignorance, balancing austerity conditions against growing demand for their services."
She says it also reveals "the impact of property management on a charity's work and on their bottom line. Property is the largest budget line but, as the survey shows, also poses the biggest threat to long-term survival. Relying on friends and colleagues for property advice is a risky business, not least for the beneficiaries charities serve".
Aileen Peverell, head of facilities at charity Oxfam, says her organisation is lucky enough to have a whole facilities team and that sometimes smaller charities, which are not so fortunate, approach her for advice although, she points out, "we do what we can when we can, but we are also stretched".
Peverell says: "Small charities often fall into 'bear traps' such as deals done with the more unscrupulous landlords. Many small charities don't even know where to get property and what kinds of building controls to consider."
She adds: "Many of them do not understand that a building needs fire exits, fire detection systems and special glass in the windows, but they have no idea of these things when considering a property smaller charities do not always consider what they need in a property."
"Charities will also sometimes overbuy space because it's a nice area, but then realise they cannot afford it," says Peverill. "Or many might get the right property but discover that the rates they have to pay are extortionate - or they haven't properly considered the cost of utilities such as heating".
She feels the way forward is to educate the profession. The solution is not necessarily "a full-time building manager," but "there should be advice" for smaller charities, she says.
Need to professionalise
Those who are advisers need to also market themselves better to the sector, she says. The Ethical Property Foundation has recently been named as one of these advisers - it will be the primary supplier of property advice to charities contacting the government's Charity Commission.
But Swinson concurs with Peverell's point. "There's a job to do to raise awareness about the support available, but there are also opportunities for the commercial property industry, charity grant funders and trustees to get involved."
The report also reveals that more than 40 per cent of charities experience difficulty in obtaining core funding to cover premises costs; that more than a quarter cannot borrow to buy a building; 57 per cent are either planning or would consider sharing space to reduce costs; and that 80 per cent do not consider that their voice is heard by local authorities in local strategic planning.
For larger charities, such as £50 million Catholic aid charity CAFOD, things are a little different. Al Lewis, FM at CAFOD, said the altruistic aims of third sector work often means other areas get overlooked.
"Charities are more externally focused than businesses," he says. "We are focused on our supporters, getting them engaged and supporting us with time and money. And then we are focused on our recipients, giving away our money and ensuring it is well used and does the most benefit. The profit driver does not exist in the same way in charities, it is not about the bottom line, it is about serving others."
Lewis says this can mean "the physical building, working environment and so on, are harder to make a priority. We want to give away as much of our money as we can, so sometimes we do not invest where we should. There is always a tension here".
Charities must professionalise, says Lewis. "Most are already doing so, both in FM and other areas. CAFOD is a £50 million organisation, so it cannot be run purely by volunteers and goodwill. This is not the 1970s, when charity amateur was an acceptable ethos. We need trained professionals to follow best practice in FM and ensure that we get best life cycle value for our money, not just the cheapest products or services available."
The foundation's charity property survey can be found here.