The government has changed its message from “stay at home” to “stay alert”, and has allowed individuals to meet one other person from outside their household in an outdoor space, such as a park, so long as they maintain a two-metre distance. Those that can’t work from home are being encouraged to return to work – albeit avoiding public transport if possible.
However, this relaxation of the lockdown is not going help charities. Charities shops remain closed, and fundraising at events and face-to-face remains impossible. Charities’ finances remain a source of concern. Although some fundraising activities have gone virtual, a wide range of income sources have been affected by the current situation, whilst many charities are still incurring costs and having to keep some services running.
As reported in last month’s edition, the government’s rescue package of £750m was highly targeted to frontline charities and small charities. It was also far less than was estimated as needed to ensure the sector could weather the crisis.
Even if a charity does fall within in the scope of the £370m allocated to smaller charities, there has been criticism about how long these funds have taken to reach their intended destination.
In a blog, Karl Wilding, chief executive of NCVO, wrote that the explanations from government as to why there were delays in the funding being delivered were “starting to wear thin”. He called for “immediate clarity” from the government and the National Lottery Community Fund, which has been charged with distributing the government funds, on how and when the grants will be made.
Away from the charity-specific package, some flexibility for charities has been introduced to the government’s support package for businesses.
The Coronavirus Business Interruption Loan Scheme was one of the first elements to be unveiled. It was initially stated that to take part in the scheme an organisation, including charities, needed to generate at least 50% of its income through trading.
However, at the end of April, the British Business Bank, which oversees the scheme, updated the terms and conditions to remove the trading requirement for charities. “Charities are in principle eligible if they satisfy the other eligibility criteria of the scheme,” it said. “Note: registered charities are exempt from the requirement that 50% of the applicant’s income must be derived from its trading activity.”
Similarly, emergency grants for businesses are also now available for charities. Alok Sharma, the business secretary, announced that local councils will have the discretion to make grants of up to £25,000 to small charities which own properties and would normally meet the criteria for small business rates relief. These charities need to employ less than 50 people and demonstrate a “significant drop in income”, Sharma said.
Action being taken
Regardless of the availability of, or eligibility for, government support, charities are having to take financial action.
A survey carried out by Pro Bono Economics, for which Civil Society News was media partner, in early May revealed that just over half (52%) said they had sought funder flexibility in their spending plans, project delivery and reporting requirements. More than two in five charities (44%) had drawn on their financial reserves.
Nearly half of the respondents (48%) said the single biggest issue they were facing was the impact of social distancing on their ability to deliver their services.
Just over one in five (22%) said that the way in which Covid-19 had affected their ability to fundraise was the biggest single issue. Meanwhile, 18% instead pointed to its effect on their ability to plan for the future.
Information and the latest news are crucial tools for charities during the pandemic so Civil Society News has a coronavirus hub which contains free information and advice for charities during these difficult times.