Ahead of CFG's Annual Conference 2023, Sophie Ward, Head of Charities and Education at HSBC Global Private Banking, talks to Emma Abbott about the resilience of UK charities, how the sector is evolving its commitment to sustainability and how charities are adapting their investment strategies...
Firstly, I think it's important to say that the UK charity sector is an incredibly resilient sector, and one that we should all be very proud of. UK charities are doing amazing work today supporting people in such tough economic conditions and dealing with both residual Covid challenges and the cost of living crisis.
The economic outlook now is less negative than people were worried about coming into this year, but charities are still operating in difficult circumstances.
For the charities themselves, a resilient and thriving organisation is one that has been adaptable to accommodate new and difficult circumstances – though it’s not easy by any means. Many charities have had to change their funding or financing model, or think about adapting how they deliver their services or looking to digitise. Adaptation and modernisation have been key.
What are charities looking to do to be more resilient? Have their approaches or needs changed?
We’ve seen a lot of charities looking at how they can modernise their infrastructure and part of that has been to embrace digital banking. Where it’s appropriate – and it’s not for all charities – digital banking can be an important part of building resilience for the future.
As interest rates have risen in the last 12 months, we’ve also seen charities really look at their reserve cash much more closely and consider it more strategically. They’re embracing a whole range of ways of enhancing yield and thinking about cash management over and above traditional bank deposits.
What is HSBC Global Private Banking doing to help charities survive and thrive in 2023?
We’ve been helping clients to think long term about their investments and responding to their desire to look at the sustainability of those and make sure that they’re adapted to a net zero future.
Across the rest of the balance sheet, HSBC is working very closely with clients on how to enhance yield and manage their reserve cash. We’ve been reviewing our lending products as well, to enable us to put notice periods on our portfolio lending, which gives our clients more comfort around the certainty of their lending lines.
How have the past three years impacted the way that charities and non-profits view their investments and approach generally?
We’ve seen a real shift in how clients think about sustainability. They really want to make sure that their portfolio is considering a sustainable future and they’re shifting from a position of ‘do no harm’ to one of creating a positive impact.
We've also seen more clients happy to look at total return rather than just drawing down on income. And, for larger organisations, we're seeing more of them willing to consider long-term illiquid assets such as private equity to try to harness greater long term growth.
These are both themes that are prevalent within broader investment markets as well. But it’s interesting that charities are able to think differently and to align themselves with how broader investment markets consider portfolios now. We’re seeing that growth and upside focus from clients as they want to really make sure their portfolio is robust for the long term.
What are you most looking forward to at this year’s Annual Conference?
For everyone to come to the talk we’re giving! And I’m really looking forward to connecting with all the charities in person again. This is our third year sponsoring the CFG Annual Conference, which we're really proud and delighted to do.
We think that the conference brings together a really interesting range of speakers across a charity’s full financial considerations, which will help them make sure they're really surviving and thriving into the future.
And for HSBC, it's a great opportunity to show our support for the charity sector, and share deeper insight and guidance into some of the great tools we have to support them with their investments.
Thank you for your insights, Sophie! See you and the team at #CFGAC23!
Our Annual Conference on 29 June is now fully booked. But you don't have to miss out! Please join us online during Annual Conference Week when we'll be running a range of exciting online sessions!