In acknowledgement of the critical role played by charities in the social fabric of this country, the Chancellor announced a £750 million package on 8 April to help support frontline charities struggling as a result of the fallout from the coronavirus crisis.
£370 million of the fund has been allocated to small local charities working with vulnerable people in the heart of communities and £60 million is ring-fenced for charities in Scotland, Wales and Northern Ireland. In England the support will be provided through organisations such as the National Lottery Communities Fund as well as the Government providing up to £360 million of direct grants to charities providing essential services and supporting vulnerable people during the crisis. The Chancellor has also committed to matching, pound for pound, the money raised by the BBC in response to their 'Big Night In' charity appeal on 23 April.This funding package is in addition to any other financial support which charities are already eligible, such as the job retention scheme, and is designed to keep charities afloat whose services remain vital through the coronavirus pandemic. The Chancellor acknowledged he could not match all of the funding lost by charities as a result of the current crisis, with the £750 million representing a fraction of the £4 billion estimated to be lost from the sector in the next three months, and that for some charities the decision to close or furlough staff might be the right one.
The Government is now working to identify priority recipients with the aim for charities to be receiving the money in the coming weeks and it is expected that the pot allocated to the National Lottery Communities Fund will be available for distribution within a similar time frame.
Charities on the front line are facing an increased demand for their services in incredibly difficult circumstance just at the time their income is being squeezed. This is placing an enormous amount of financial strain on charities at the very time they need to be investing more resources into protecting the emotional and physical health of their staff and service users. This financial package is no doubt a huge boost to the sector but given the ever widening funding gap, many feel that this announcement by the Chancellor does not go far enough. In addition, there are tens of thousands of charities who are not working on the front line during this crisis, whose work nonetheless remains of critical importance to society, whose funding streams have all but dried up in the last month and, with no additional financial support in sight, who are being left to make some very difficult decisions about their continued provision of services and their future viability.
The Charity Commission has published new guidance for the charity sector on running a charity during the coronaviruses outbreak which can be accessed here. Within this the Charity Commission encourages charities to review their financial planning and think about whether certain projects, activities or spending can be stopped or delayed. It reminds charities that in circumstances such as these it can be appropriate to spend reserves but that this is not always straightforward e.g. where a charity's reserves are restricted for a specific purpose or are comprised of permanent endowment funds or assets. It advises that a charity thinks very carefully, and seeks professional advice, before releasing such funds. For most charities, there is a need for the Charity Commission's consent before they can access restricted reserves or permanent endowments for general expenditure purposes. Although the Charity Commission has pledged in its guidance to be as 'helpful as possible', obtaining such freedoms can be a complex process.
Here at Trowers & Hamlins our specialist charities team are working very closely with our charity clients to offer support and guidance through these troubled times to ensure they can continue to do what they do best: protect those in society who need it most.
