Antonia Swinson: We need much greater attention paid to property at trustee level

Earlier this year, the Ethical Property Foundation launched its fourth bi-annual Charity Property Matters Survey in partnership with the Charity Commission, Charity Finance Group and supported by Steeles Law. This research, launched in 2012, has become a vivid bi-annual screenshot of our sector’s property situation.

Crucially, it is independent of the property industry, which means the voice of all charities is heard, irrespective of size, cause and region across England & Wales, as opposed to the industry preference for the big few. The survey is building our understanding of the key property issues facing charities as well as their ability to manage their property effectively for staff and beneficiaries.

Unsurprisingly, the majority of our 474 respondents - in line with the sector - do not own property: 44.2% indicated they owned as opposed to 55.8% stating they did not. The big change from our previous surveys is that most charities now use private landlords, or a commercial body, as opposed to owning their key property asset or renting from their local authority. One third (33.33%) lease from a private landlord or commercial body – up from just 11% in 2012.

This means charities are increasingly dependent on private landlords, with all the accompanying issues this creates.

Almost half of our respondents have office properties (49%), while the five most common types of property for the sector are offices, community centres, other, residential and education/training. Property eats up significant annual costs. With 23% of respondents spending over 20% of annual expenditure on their property costs, and over 15% (15.4%) spending a quarter of their income on this. Where is this money coming from given that 58% report difficulty in getting funding for property? As we know, it is becoming increasingly difficult to obtain core costs from grant funders and as for full cost recovery, this remains a holy grail for those delivering public sector contracts.

The survey also paints us as a restless sector with plans. Over a quarter of charities indicated that they would acquire property in the next 12 months, while 15.64% stated that they would dispose of property in the next year. Just under 20% look to share premises with another organisation. The interplay between property and social mission is tricky: 20% of charities state they are currently in unsuitable premises while alarmingly, almost 30% of charities indicate that property issues are a barrier to delivering their charitable objectives. This is significantly higher than our previous surveys. In 2016, only 17% of respondents stated they agree or strongly agree that they perceived their property to be a liability that stands in the way of delivering charitable objectives.

Equally concerning is the number of charities who believe that property is a risk to their future financial sustainability. With more than a third believing the risk from their property is high or very high.

The survey also covers the levels of property knowledge within the sector. A whopping 50% of charities have been affected by unforeseen property costs, while 18% of respondents stated they had low or very low confidence in property management. and two thirds of respondents (66%) have no strategic property plan. Alarmingly, given how many vulnerable adults and children as well as staff and volunteers use charity buildings daily, 41% of charities have no-one with responsibility for property within their organisation. Close to 40% stated they had no regular risk assessment and that, shockingly, property was not aligned with their business plan. Are all their trustees asleep?

So where are we now? Given how risky charities consider property to be, we need much greater attention and resources paid to property at trustee level to ensure property budget lines are spent as a priority. This is urgent stuff. It is time for our sector to wake up and wise up fast.

Charity begins at home in the property industry, and, if we keep sticking our head in the sand, we’ll deserve to be eaten for breakfast.

Antonia Swinson is the chief executive of the Ethical Property Foundation

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