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Monday, January 25, 2010:

Why it makes no sense for charities to hoard cash 

Reading the charity trade press, it is interesting to note that one factor that is having a major impact on many of the larger charities is the low interest rates.

While low interest rates does have an impact on the World Land Trust, it is nothing like as significant as the fall in the value of the pound against the dollar. This is because most of our funds are raised in pounds, but spent in dollars.

But the main reason why the fall in interest rates does not have a massive impact on the WLT is because we do not hoard cash.

Charities are generally established to fulfill a need. It therefore does not make sense to sit on piles of money when we could something proactive with it.

Land does take a long time to buy, and its price is going up despite the recession. But we are now in the fortunate position of having a revolving fund, thanks to the generosity of one of our donors. Combined with our Action Fund reserves we now have around £400,000 that can be used to make an instant payment, should important land become available, so that we can secure it while fund-raising takes place. To us this is far better use of money than putting it in the bank to earn interest.

So however much you donate, whether it is £5, £50 or £500,000 we will be able to put it to good use.

Posted by John Monday, January 25, 2010
 
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