Were UK culture, sport and recreation charities prepared for the 2008 economic downturn? an application of Tuckman and Chang’s measures of financial vulnerability

A new piece of research offers further insight into sport and how prepared charities were for the financial crisis:

Thomas, Rob and Trafford, Richard (2013) Were UK culture, sport and recreation charities prepared for the 2008 economic downturn? an application of Tuckman and Chang’s measures of financial vulnerability.VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 24 (3). pp. 630-648. ISSN 1573-7888 10.1007/s11266-012-9273-1

UK charities experienced rapid growth during the middle years of the first decade of the new millennium. The issue investigated in this study is whether the charities took the opportunity to strengthen their financial positions before the economic recession of 2008–2009. Having evaluated, and established the empirical robustness of, Tuckman and Chang’s measures of financial vulnerability, they are used as the basis for constructing a Charities Financial Exposure Index (CFEI). Variants of the index are applied to a panel of more than 300 large UK charities in the Culture, Sport and Recreation sector for the period 2002–2007. The findings are that by 2008 these charities were in a stronger financial position than they had been in 2002 and were therefore better prepared to face the onset of the so-called credit crunch recession.

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