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U.K.'s Research Charities Are Struggling

27 May 2009 6:55 am
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Medical charities in the United Kingdom, which account for one-third of all public funding for medical research in the country, are being battered by the economic crisis, according to a survey published this week. Small charities are especially hard-hit.

The U.K.’s Association of Medical Research Charities (AMRC) surveyed its 117 members and found that more than three-quarters of the organizations expect to be “significantly affected” by the financial meltdown, as income from investments and endowments fall or corporate and personal donations decline—or both. Last financial year, AMRC’s members spent £936 million on research, and although 52% said they hope to maintain that level of research funding, 26% expect to cut it by 10% to 40%.

Smaller charities will bear the brunt of the crisis because “they have more limited reserves to dip into to weather the storm,” says Simon Denegri, chief executive of AMRC. “The real bite could come next year,” he adds, as charities begin drawing on their reserves to plug the financial gap.

The Ataxia-Telangiectasia Society is one of the small charities already feeling the crunch, as 55% of its income relies on trust and foundation money caught up in the interest-rate slump. The charity’s income is down on average 14%, and it has had to cut back on long-term projects owing to the uncertain climate.

“Our income fluctuates more in terms of percentage than a large charity might,” says treasurer Vincent Poupard. “We don’t really know how next year will go, but we suspect it will be worse than the last.”

The Muscular Dystrophy Campaign, which has invested more than £50 million in research since it formed in 1959, has had to cut its research budget by 15% this year. “At the moment, nobody can bet on their future income,” says the charity’s chief executive, Philip Butcher.

Larger charities are not immune. Earlier this year, the Wellcome Trust reported that it would cut medical research funding to £590 million this year—a £30 million drop from last year. Cancer Research UK says its income from fundraising this year “is likely to be close” to last year’s total but couldn’t yet predict how its endowments and investments would be affected.

Denegri says that in general charities will be committing to fewer projects, cutting administrative costs, and attempting to streamline their processes. There is also a trend toward cofunding: 64% said they plan to pool resources with other organizations to make their money go further.

AMRC members are also worried that the U.K. government is backing away from its commitment to help university and hospital labs pay for overheads associated with charity-funded research. A special fund established in 2006, the Charity Research Support Fund (CRSF), was meant to have a budget of £270 million by 2010 but has so far only reached £195 million, and there are “growing concerns,” says Denegri, that CRSF will not continue beyond 2010. If so, research charities are worried that they would be expected to pick up the slack. “That’s not our function,” says Norman Barrett, chief executive of the Association for International Cancer Research. He worries that “the government is committed to debt in so many other areas now, they’ll be looking everywhere they can to make savings.”

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