Charities have been urged to consider the short-term pain of consolidation or mergers as they battle for survival in Bermuda’s harsh economy.

Caroline Foulger, chairwoman of Bermuda Business Development Agency, encouraged the third sector to follow the example of the international business community by undergoing tough measures that could lead to a brighter long-term future.

Speaking at the third sector conference “Building Hope” at the Hamilton Princess yesterday, Ms Foulger said that job losses could eventually be recouped if the organisations could become stronger.

Elaine Butterfield, executive director of the Centre on Philanthropy, which organised the event, has previously warned Bermuda’s charities are experiencing unprecedented financial pressure, with 65 per cent experiencing an increase in demand for their services coupled with a reduction in donations.

Ms Foulger told the audience: “We have lots of third sector organisations in Bermuda. In the same way that we have seen consolidations going on in the insurance industry, there is never a perfect overlap, but there is a degree.

“By coming together, there is, perhaps, an immediate pain in business where there are some jobs lost but eventually it ends up being a stronger company that can achieve and employ more and contribute more.

“I would encourage those in the third sector to think about areas where it makes sense to consolidate or merge.”

Ms Foulger was a panellist at the conference along with senior lecturer of economics at the Bermuda College Craig Simmons, writer and economic analyst Larry Burchall, and Kumi Bradshaw of Firm Advisory.

The title of their discussion was “Survival of the Fittest” but Ms Foulger said the title was only shorthand for a more important message from evolutionist Charles Darwin that those most likely to survive are those most responsive to change.

She encouraged members to focus on their core mission in the current climate.

“Think about what your real value proposition is. Over time, companies, and I am sure your organisations are the same, start to get some ‘mission creep’. You start off doing one sort of thing for your clients and then you morph into doing other things.

“Think about what you are best at, what are you better at than anyone else at delivering. It is very tempting to get sidetracked with other things when you know you can help but you may not be the best person to offer that help.”

Mr Simmons delivered a fairly positive outlook, telling the audience: “I have just got back from the future and it is looking pretty good so you don’t have to worry about change.”

He said that Bermuda had spent the past 20 to 30 years in a “grazing period”.

“Too many of us had our heads down like cattle and didn’t realise the grass wasn’t growing as fast as we were grazing. This is an opportune time for us to readjust and get used to the new reality.

“People in the third sector are far more productive than people in market economies. Pro-social behaviour allows you to get a bigger bang for your buck — it is not unusual for the third sector to hire highly talented lawyers and accountants for free and they will work harder.”

Mr Burchall highlighted Bermuda’s growing GDP but warned that due to “the peculiarities and uniqueness of our situation, it is not going to feel like it”.

“It will feel like it is dragging on and that is because our need to service our debt is increasing, increasing, increasing. In the end it impacts Bermudians,” he said.

Mr Burchall spoke positively about the potential economic impact of the America’s Cup but stressed that for our economy to be able to support our debt service cost, it would be crucial to increase the working population in Bermuda from 33,500 to at least 45,000.

Mr Bradshaw spoke of the importance of transparency and good governance within the third sector as well as ensuring sustainability.