Local charities reliant on help from exempt companies could be badly affected by the collapse of insurance giant AIG and the deepening US financial crisis, according to experts.

The Centre on Philanthropy — which coordinates the giving of some $18.5 million each year from almost 70 international and local companies — has already told charities to start thinking about 2009 and put in place strategies to raise funding from other sources.

Pam Barit-Nolan, the centre's executive director, told The Royal Gazette: "We have a number of corporate members warning that the overall impact of the hurricane season and the financial markets will have an impact on charitable budgets. If they are not as profitable, they are likely to cut their budgets."

She said AIG, a member of the centre's Bermuda Donor Forum, had already tightened its belt in recent years and wasn't one of the biggest givers.

But its staff regularly take part in corporate giving days; indeed, a team of about 30 spent yesterday helping out at Bermuda Aquarium and Zoo despite the company's uncertain future.

Ms Barit-Nolan said a significant fallout for local charities from the events of the past week had yet be seen. But she added that the overall unpredictability of the financial markets was disturbing for non-profit organisations, as exempt companies give far more than local business.

"The insurance companies here are getting triple whammied," she said. "They've had low insurance premiums, followed by three hurricanes and now the financial markets.

"At this point the question is: how dramatic an impact will there be? I think we'll see more next year than this year."

Martha Dismont, executive director of the Family Centre, said her organisation had already taken steps to raise revenue from different sources and become more self-sufficient, including annual gala fund-raiser this evening at the Fairmont Southampton.

"I think the charities in general are somewhat concerned not only now but about next year and the unpredictability of this environment at the moment," she said.

She added: "We haven't had huge support from AIG but I think, more importantly, it's the fact that when other institutions see the challenges that could happen with a huge one like that then I think they get cautious.

"The question is how does this community manage that because there will be a knock-on effect for all of us."

Claudette Fleming, executive director of Age Concern, which last solicited a donation from AIG in 2006, said Bermuda's charitable sector was mainly supported by corporations rather than individuals.

"But she added that the Island had seen similar situations before and charities had survived.

""I have been in this business for ten years and this isn't the first cycle we have been in," she said. "We are somehow able to find the resources that are needed and people and corporations still want to give. I haven't found necessarily that economic downturns make people not want to give."

She said charities should still be looking at ways to reduce costs and diversify streams of revenue. "We have been encouraged by donors in the last three to five years that we have to put business plans in place or strategic plans in place. We have to look at sustainability over the long-term."

Insurance companies like ACE and XL and organisations such as the Bank of Bermuda Foundation give millions to local charities in Bermuda each year. But Cindy Samuels, president of Big Brothers Big Sisters of Bermuda, which mentors youngsters, said non-profit organisations rarely relied on one donor and the donor often changed each year. She said the AIG situation was not necessarily bad for charities since all the companies' lines of business would be sold off, making other firms stronger.

"The companies that are quite strong will continue and will only be stronger. I don't think the charities should see it as negative."

Vice-president Rosette Simmons said she thought the current crisis was a concern. "We rely a lot not just on AIG but on international business here in Bermuda in terms of meeting our funding requirements.

"If we don't have this resource, where would our resources come from? It's a concern and we are going to have to sit down and determine what to do if those funds are not available."

Joanne Chisnall, volunteer coordinator for Bermuda Zoological Society, said "wonderful help" at the zoo from corporate staff, such as those from AIG yesterday, was invaluable. "If we were to lose people like AIG, XL, ACE, we would certainly lose a lot of volunteers. Companies like AIG are our mainstay. It's sad for us to have some companies that are close to us going through that kind of thing."

* Does your organisation rely on help from international business? Is the collapse of AIG likely to hit you hard? Call our newsdesk on 278 0137 or e-mail news@royalgazette.bm.