of the birds, with the enjoyment of the members being seen as entirely inci-
dental.
However, some changes are in the pipeline. Heavy lobbying by the
National Council for Voluntary Organisations (NCVO) has successfully
persuaded the government to repeal the Trustee Investments Act of 1961,
which put restrictions on investment of assets into gilts and equities in
order to protect charities from ‘foolish decisions’ by trustees.
Charities welcomed the proposal. It will open up new investment
options and allow them to make use of modern portfolio theory in manag-
ing their funds. Charities have always believed that they have been disad-
vantaged by this law; in the past a £2 million investment in the stock
market at the time the Act was passed would have increased sevenfold by
1996, whereas the same investment in bonds would have yielded only a
£750 000 return.^1
Political activity
To achieve and retain their charitable status, charities are not permitted to
partake in any direct political activity. Charities such as War on Want and
Oxfam are often investigated by the Charity Commission on the political
nature of their activities. Charities have to resort to ‘lobbying’, although the
fine line between this and direct political activity has resulted in further
guidelines and rules from the Charity Commission.
The public purse
There is little evidence that a recession affects individual donations to char-
ities. Over the last 10 years, during one of the most prolonged recessions in
recent history, arguments that the British public are suffering from ‘charity
fatigue’ appear unfounded. Indeed, some of the most popular charity
campaigns have been launched in this time, Live Aid, Children in Need
and Red Nose Day being successful examples.
It appears to have had a greater effect on company donations. Many of
the UK ‘blue chip’ companies reduced their yearly donations. By 1996 this
had fallen to a yearly total of £160 million or 0.2 per cent of profits, the
lowest level of corporate donations for five years. This was defended by
companies such as BP and Marks and Spencer, who pointed out that they
make contributions in other ways by seconding staff to charities or pro-
viding skills or accommodation instead. Company liquidations did not
improve the situation. The collapse of Barings Bank meant £12 million less
for charities in 1995/96.
However, the launch of the National Lottery, in 1994, appeared to bring
a far more serious threat to charities’ long-term revenue. A survey under-
taken in May 1995 by the NCVO, seven months after its launch, showed a
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