Charities: When caring means sharing . . .: Charity, as they say, is big business. Joanna Gibbon asks what large agencies can do when smaller counterparts feel the chill of recession

THIS YEAR'S Charity Trends, published last week by the Charities Aid Foundation (CAF), was not cheering news for the many hundreds of thousands of medium and small charities, which account for 90 per cent of the charitable sector in Britain. As they feel the chill of reduced income from donations and other sources during 1990/1991, their big brothers - those seen as the top 400 fund raising charities - have enjoyed a 6 per cent increase in voluntary donations.

Michael Brophy, Director of the CAF, says the the larger, more professional charities are taking a bigger slice of the cake - a cake which has shrunk. 'With companies and individuals giving less and unusual charities - such as opt-out schools and hospitals - forming as well, I assume that the smaller charities are having a very rough ride, indeed, even going out of business.'

Indeed, the CAF's top 400 charities had a collective income for 1990/91 of pounds 1.45bn and some, during the last few years, have not been spending all that they receive. Sometimes this runs into several millions of pounds. The National Trust, the Royal National Lifeboat Institution (RNLI), the RSPCA, the Salvation Army, the Guide Dogs for the Blind Association, Help the Aged, the Royal Air Force Benevolent Fund and Barnados, are just some of those who fall into this category.

The temptation for successful charities to squirrel away funds during a recession must be great but Mr Brophy, who supports them in their good fortune, warns them of complacency. 'If a charity is a successful machine for raising funds then it must ensure that the money is effectively spent in the relatively short-term, especially during a recession.'

Although Mr Brophy does not feel it is sensible to ask such charities to stop fund- raising completely, he feels some, particularly those with very narrowly defined aims, should consider broadening their remit so as to spend their money more widely, possibly giving to other charities working in the same field.

The trustees of a charity are primarily responsible for ensuring that a charity spends its money according to the association's objectives: if they want to widen or change a charity's area of work they must first consult the Charity Commission. Last year the Commission updated 750 charities' remits. Richard Fries, the Chief Charity Commissioner, was unable to say whether the number included any large, wealthy charities.

'It has to be a fairly extreme position before one can say a charity is badly administered because it is accumulating funds,' stresses Mr Fries. However, he feels that a sense of public accountability is a vital element in the future effectiveness of charities.

Both Mr Fries and Mr Brophy feel there is room for large charities to do more in demonstrating their concern for smaller organisations in related fields through collaborative work - such as giving charities with fewer facilities access to high-powered fund raising, marketing and public relations teams. 'The big helps the small. Larger charities with paid staff can behave as an umbrella body within their fields,' says Mr Brophy.

When asked about its unspent income of pounds 22m during the last two accounting years, Alison Radevsky, a spokeswoman for the Guide Dogs for the Blind Association, explained that legacies to the charity increased dramatically five years ago. 'From that time we began to plan, but you can't spend all that money at the drop of a hat.'

Apparently much of last year's surplus has been spent on capital building projects at the association's 12 regional training centres. This year, the association says, there will be no surplus; next year it may have to use some of its reserves which stand at pounds 100m.

At the moment, the association pays for 4,100 guide dogs - this includes breeding, training and all food and veterinary bills for the rest of the dog's life.

The charity's secondary aim, to provide services and facilities for the blind as it deems fit, has been put into action increasingly. About 10 per cent of its income is directed toward working with other agencies which help blind people, even though it can be difficult to coordinate, and to prevent duplication of, services. 'Fifty per cent of our expenditure could be spent in this way, but it isn't, because we don't want to prejudice the main aim of providing dogs,' says Miss Radevsky.

Lt-Cdr Brian Miles, director of the Royal National Lifeboat Institution, which according to the CAF did not spend about pounds 27m of its income during the last two accounting years, is proud of the charity's work. 'The RNLI has a massive responsibility to provide a lifeboat service to a very high standard. In order to maintain it at the standard the nation has come to expect, the RNLI is very big business in a sense. I always get disappointed when people say, 'oh, you are flush with money.' We have been successful but we have worked damn hard for it,' he says.

The RNLI, which has saved over 120,000 lives since it was founded in 1824, has a commitment to the Government to provide a lifeboat service up to 50 miles from the shore. At present, it has 211 lifeboat stations and 400 lifeboats; during the next fifteen years it is upgrading most of the boats with faster models, a project which will cost over pounds 2m.

'We analyse extremely carefully what our future budget needs to be for the new lifeboat building programme, for back up and shore work. Setting aside money is essential, it is not as if it is slopping about,' explains Lt-Cdr Miles, adding that the RNLI does not see its fund raising challenge as infinite. The RNLI, too, has investment assets of about pounds 100m: it says this amounts to three years' reserves if all donations and legacies were to stop immediately.

Recently the RNLI, which has no remit to give to other charities, has been sharing its expertise among other life saving and sea rescue charities, such as the Royal Life Saving Society. Next week Lt-Cdr Miles, with his fundraisers and PR team, will be spending a working day with two smaller marine charities who have asked for help. 'If people want to tap into our experience we are always pleased to welcome them. The RNLI is not an ivory tower.'

(Photograph omitted)