It is estimated that the charity sector will lose some £4.3bn in the next 12-weeks with the postponement of the London Marathon and other sporting and cultural events.
On 25 March 2020, the Charities Statement of Recommended Practice Committee issued guidance. It warns that Government measures to limit the spread of the virus have: “Potential implications for charity income, expenditure and commitments, and the value of charity assets and liabilities. In some cases, the implications may be so severe as to cast doubt upon a charity’s financial sustainability.”
Below we explore some key considerations and practical guidance for charities during these uncertain times.
Charities which need an extension to their annual return deadline due to Coronavirus can contact the Charity Commission for England & Wales to request a delay.
At present charities can only apply for Government loans if more than half of their income comes from trading activity which is likely to exclude many of those that have a mix of different income sources.
The Government has acknowledged the impact on the sector and has promised some aid although no specific details have yet been published.
However, there are some charitable foundations and other organisations that have announced that they will make funds available. These include:
- The National Emergencies Trust (NET): The NET has launched a Coronavirus fundraising appeal to raise funds for local charities with donations managed by the Red Cross. NET will award grants and distribute money raised through local community foundations.
- £2m London fund: London’s City Hall and City Bridge Trust have each contributed £1m to a fund for London charities affected by Coronavirus. The emergency scheme will be coordinated by London Funders and available to organisations facing immediate financial pressures and uncertainty because of the Coronavirus. Full details of the new emergency support fund and how to apply will be published shortly here.
- National Lottery Community Fund: The National Lottery Community Fund has started working with grantees, partners, and other organisations to understand how it can support communities and the sector during Covid-19.
- Wellcome Trust: The Gates Foundation and Wellcome Trust are each contributing up to $50m, and the Mastercard Impact Fund is committing up to $25m, to speed the development of and access to therapies. The Covid-19 Therapeutic Accelerator will coordinate research efforts and remove barriers to drug development.
- £1m Money Saving Expert fund: Martin Lewis, the founder of Money Saving Expert, has pledged £1m to support small charities.
- The Indigo Trust: The Indigo Trust is making £2.5m available through emergency grants to help charities respond to the Coronavirus emergency.
- £1m John Lewis and Waitrose: The partnership has launched a £1m community support fund. Local stores will have these funds to support their local area based on the needs of the community.
- Funding list: Ian McLintock has also put together a list of more than 50 sources of charity funding which you can find here.
Other sources of funding
Charities can also benefit from the governments Coronavirus Job Retention Scheme for those employees who are furloughed during this period. Details of the scheme can be found here.
Any charity which is providing services which attract VAT and in a net payment position will be able to benefit from the ability to defer VAT payments for the period to 30 June 2020 until the end of the year.
Charities face the same considerations in dealing with the outbreak of Coronavirus as any other business. Cash remains the lifeblood of any organisation and we draw your attention to the practical guidance found here.
New fundraising campaigns
With events and public fundraising cancelled, most charities are facing income shortages. In response, a number of charities have launched self-isolation and stay-at-home campaigns to fundraise during the Coronavirus crisis. Others should follow this example.
A few examples of these campaigns include:
• Brain Tumour Research: Wear A Hat Day
• British Heart Foundation: MyMarathon
• Charity Make-A-Wish launches campaign for families in self-isolation
• Mind virtual fundraising ideas
If you would like to discuss any of the above or have other queries about how you can make the right decisions for the future of your business and your income, please get in touch with your usual Blick Rothenberg contact or one of the contacts to the right.
You can also visit our Coronavirus – Practical Guidance for businesses today Hub for our latest updates and insights.