'Charities are in crisis and need government to step in now,' CFG boss warns

25 Mar 2020 News

The charity sector will be “decimated” if the government does not act now and make a substantial package of financial support available, the chief executive of the Charity Finance Group (CFG) has warned.

In a blog on the CFG yesterday (24 March), Caron Bradshaw wrote: “I usually write in more measured tones. However today I feel compelled to side step softly-nuanced diplomacy, take off my gloves and be more forthright. I am so very disappointed and frustrated. Charities are in crisis and we need deliberate and immediate action to avert disaster.

“Charities are at the very heart of society. What we do touches every aspect of life and I defy any member of the public to say that they have nothing to do with charity at one level or another,” she added.

On Friday charity leaders warned that the sector stands to lose more than £4bn over the next 12 weeks and the government has been in talks with the sector for some days. 

Yesterday afternoon the minister for civil society that the govenment is working on funding package for charities. 

CFG 'disappointed and frustrated'

Bradshaw said: “I have been disappointed and frustrated at the lack of reference to, or recognition of the role charity and social change organisations play in the government's daily briefings. With the exception of the salary scheme which whilst welcome for some charities is totally ineffective for others, there has been no mention of this sector. No comprehensive package of support. We are left to see whether the schemes devised for business might also work for us. They often do not.”

Charities of all sizes face an imminent cash flow crisis because a lot of fundraising and trading income has been cut off due to social distancing measures to prevent the spread of coronavirus. 

Some charities are also seeing an increase in demand. This means measures enabling employers to place staff on leave and claim a grant to cover the costs do not work for many charities. 

Bradshaw also said: “Social distancing and isolation of vulnerable individuals has decimated capacity.”

Bradshaw said that for a number of years CFG has been encouraging charities to diversify their funding models and encouraged charities to set aside reserves. But she said that no one could have predicted the impact of this pandemic or prepared for it.

She asked people to push their MPs into action.

DSC: ‘Government has been too slow to respond to the magnitude of what is coming'

The Directory of Social Change is asking charities to write to their local MPs and has created a template people can use.   

Alongside other charity infrastructure bodies it has developed key policy asks for the government to implement to help keep charities operating in the next few months. 

In a statement, it said: “Despite some progress last week, government has been too slow to respond to the magnitude of what is coming. In particular, the Treasury remains unconvinced of the need for swift, substantial and simple financial support for our sector.

“The window of opportunity to change this may be closing, fast. Urgent action is needed today to build public and political pressure on the government and we need your help.”

It is asking that people download its template letter and send it to local MPs.

MPs back sector's pleas

Over the weekend more than 100 MPs and peers backed a letter calling on the chancellor to address the funding crisis facing charities and make funding available. 

Since then two select committees have included charities in their own letters cabinet ministers. 

The Digital, Culture, Media and Sport Committee urged Oliver Dowden, culture secretary, to "ensure no charity is forced to stop its work as a result of financial losses due to the coronavirus outbreak". 

Today the Treasury Committee also asked the chancellor what specific help charities would get. 

Diana Barran: Working with umbrella bodies 

Yesterday evening Baroness Barran, minister for civil society, spoke in Parliament about funding for charities.

She said every funder she has spoken to has said they are looking at ways they can become more agile.
 
She said the government is working with major delivery charities and umbrella bodies such as NCVO and NAVCA.
 
Barran said: "Civil society organisations and volunteers are making a huge contribution to ensuring that the most vulnerable across the country are supported. However, we know that Covid-19 presents serious challenges to the sector.
 
"We are hearing concerns around income disruption, particularly for those charities where the bulk of their money comes from public fundraising, trading or investment income, and they will be hit especially hard. We are working with partners across government in the sector to gather a picture of the impacts for civil society, including for those working in frontline roles with vulnerable and lonely people." 
 
When pressed by Lord Ramsbottom, chair of the National Emergencies Trust, who said between £3bn and £5bn was needed, Barran said: "In terms of what the government are doing, many actions have happened already, including the ability to furlough some staff offering of loans, which to certain parts of the sector—although not all, I appreciate—is important. But for some charities, demand is up sharply and income is down sharply, and we are working tirelessly and talking every day to the sector about how we bridge that gap."
 
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