Alzheimer’s Society is placing 20% of staff on either furlough or reduced hours as it faces losing around £20m of fundraised income this year.
The charity, which employs over 2,000 people, will not top up salaries beyond the government grant of 80%.
The Society has launched an emergency appeal as it seeks to address its funding shortfall.
Kate Lee, chief executive of Alzheimer’s Society, said: “People affected by dementia need our support more than ever, but the coronavirus pandemic is hitting us hard - we estimate losing £20m in income over the next 12 months.
“We have also taken the tough decision to furlough 20% of our employees, as we have to prioritise frontline staff and ensure we focus our resources on reaching more people and supporting them in the most effective way. ”
Lee said the charity was already in a difficult financial position before the coronavirus crisis.
“Like all charities our income has been affected by a whole range of challenges over the past two years, not least Brexit. Prior to coronavirus, we were therefore already looking at reshaping our future structure to best serve people affected by dementia and their greatest needs,” a statement from the charity said.
The Society is just the latest household-name charity to announce that it plans to use the furlough scheme.
The National Trust will furlough up to 80% of its staff, while Cancer Research UK will furlough up to 1,800 of its 4,000 employees. The latter will be placing all of its retail staff on furlough, as all of its 600 shops in the UK have been closed since 20 March.
Barnardo's has also said it will furlough 3,000 staff as a third of its income was “wiped away overnight”, and Oxfam is to furlough two-thirds of its UK staff.
How many charities will use the furlough scheme?
A poll of 539 charities carried out by the Charities Aid Foundation on March 31 and April 1 found that 26% of charities strongly agree that they will need to use the government’s job retention scheme and furlough staff.
Nearly half of charities, 47%, say the scheme does not apply to them.
Furlough job swap
Elsewhere, groups for furloughed employees to volunteer have been circulating on social media.
So far more than 200 people have signed up a group formed by Beth Upton, founder of Money Tree Fundraising.
The group is for UK fundraisers who are furloughed. It aims to pair people with someone in a similar role in another organisation, allowing them to agree to swap roles in a volunteer capacity.
For example, the group would match two trust fundraisers of a similar level and at a similar organisation, and get them to volunteer for each other's organisations. This would not replicate a full-time trust fundraiser job, but they might be able to “keep the basic essentials going”.
Upton said the idea formed over time, and that it could help charities that would otherwise miss out on maintaining relationships with donors.
“The penny dropped that organisations are in such bad shape that they are even having to furlough the people who could keep some money coming in and also the people who will maintain income in the long-term,” she said.
The group is in its infancy and Upton said that she foresees some initial barriers. For example, organisations might not being able to manage volunteers, as they might have furloughed people who manage that function.
Also there might be a problem of not knowing how long people will be furloughed for, as charities may have different furloughing and working patterns.
“So there are lots of issues around whether we will get enough volunteers, whether we can get enough matching done, and also if it is what people want - because there is also an appetite to volunteer at a different organisation and gain new skills,” Upton said.
Upton said that there cannot be any handover once the person is furloughed because that would constitute working for your organisation.
However, Peter Woodhouse, partner at Stone King LLP, has cautioned against the plan until further clarification is given by government.
The government guidance states: “A furloughed employee can take part in volunteer work or training, as long as it does not provide services to or generate revenue for, or on behalf of your organisation.”
Woodhouse said: “I think company A & B are using furloughed staff to provide services to their own organisation (via the other one) and are therefore in breach of the guidance.
“Of course, this interpretation is subject to further clarification from the government in due course.”