Delegates at the recent Givewell Nonprofit Finance Forum in Melbourne heard that although it could be up to five years before there is significant relief from the current economic crisis, there are measures that can alleviate the pain.
Quoting John Maynard Keynes, JM Financial’s Harry Cator said “The markets can stay irrational longer than you can stay solvent”. However Cator, who is also a Director at Reach Foundation, believes organisations that take action now, adapt to the environment and are willing to make changes, particularly in reducing operating costs and prioritising services, will do better than those who don’t make adjustment.
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Hugh Hodges, Chief Investment Officer, ANZ Trustees, warned delegates that the current crisis will impact on most sources of their income. The key he said was to work out your key needs and communicate them to your financial planner, or fund manager. “Plan strategically for your needs and how to live within your means – not just today, but in future.”
Two year forecast
Investment income = Falling
Government grants = fickle
Corporate profits = fading
Demand for services = Rising
Budget implications for the next two years
Reduce operating costs now
Reserves will be eroded quicker than you think
Services offered will need to be prioritised
Don’t sacrifice quality for quantity
Organisational implications for the next two years
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