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Charities set to lose £4bn over 12 weeks due to Covid-19 pandemic

20 Mar 2020 News

Charities across the country are facing imminent collapse due to the impact of coronavirus, leaders warned today.

Sector bodies estimate that charities will miss out on at least  £4.3bn of income over the coming 12 weeks, though the figure could be far higher. This means that from next week some will be unable to continue operating and others will begin making redundancies. 

This figure is based on charities’ overall income, making assumptions that public fundraising, foundation income, investment income and income from the private sector are all significantly hit. It is calculated using initial survey feedback from charities about their experiences in the last week and NCVO’s data on the sector’s finances.

It assumes that government income remains stable but there is no guarantee of this. It covers normal expenditure and does not include any extra costs related to the pandemic or responses to it.

Cancer Research UK, The Children's Society and Sue Ryder are some of the charities sounding the alarm about the scale of the challenge charities face and urging government to finalise a package of support. 

'This situation is unprecedented in attacking every area of charity income'

The government has been in contact with sector leaders about a package of support but sector leaders have said that without an urgent injection of money many charities of all sizes will be forced to close.

Many charities have had to cancel or postpone fundraising events and charity shops are closing due to social distancing measures.  

Caron Bradshaw, chief executive of the Charity Finance Group, said: “This situation is unprecedented in attacking every area of charity income, whilst increasing demand and costs, and is rapidly burning through reserves. If the government doesn't act now then the longer term impact on the economy, society and social well being will be devastating and almost impossible to recover from.”

Amidst the Covid-19 pandemic, many charity shops have closed and fundraising events and activities have been cancelled.  Many charities do not have the reserves to keep up with the demand for services. 

The sector has asked for emergency funding for frontline charities and volunteers supporting the response to the coronavirus crisis, especially where they are alleviating pressure on the health service or providing support to people suffering from the economic and social impact of coronavirus.

It has also asked for a stabilisation fund for all charities to help them stay afloat, pay staff and continue operating during the course of the pandemic, and  confirmation that charities should be eligible for similar business interruption measures announced by the chancellor for business.

'The government’s promise to do ‘whatever it takes’ must include charities'

Karl Wilding, chief executive of NCVO, said: “Every day counts here. I’m hearing from charities whose income has disappeared overnight but who still have to run services for their communities. Many of them have very little emergency cash to tide them over, and even those that do will run out in a matter of weeks.

“Many charities are helping in the current crisis to alleviate pressure on the health service or providing support to people suffering from the economic and social impact of coronavirus. Supporting the national response and helping vulnerable people to cope is our first priority at the moment but we cannot do that if we are on the brink of financial collapse.

“I know the government is working on this but for many charities around the country there is very little time to spare.”

Vicky Browning, chief executive of ACEVO, said: “Charities of all sizes – from local community groups to our well-known national organisations – are a vital part of our country’s response to this crisis. But the voluntary sector cannot do what it does best if it has gone bust. Charities need swift, simple and substantial funding now. The government’s promise to do ‘whatever it takes’ must include charities.”

Yet to receive clarification about Budget measures

Sector bodies have asked for assurances and details on the £330bn loan guarantees, business interruption loan scheme and additional business rates measures that the chancellor announced, but have yet to receive full clarification.

Peter Lewis, chief executive of the Institute of Fundraising, said: “Charities will have planned on raising millions of pounds which is going to be irrevocably lost because of the impact of coronavirus. The cancellation of high profile events such as the London Marathon, as well as thousands of smaller events run by local charities across the country, closure of shops, and a halt on public fundraising activity have already caused huge problems for charities who quite simply can't plug the gap in such a short time. 

“Spring and summer is a key time for fundraising, and without the right support from the government right now to mitigate the lost millions of pounds, many charities, and the services they run are at threat.”

Sue Ryder: 'The charity is having to make incredibly difficult decisions regarding its future'

Heidi Travis, chief Executive, Sue Ryder, said: “Sue Ryder is experiencing a devastating impact as a result of the coronavirus. With our vital palliative care services now at risk, the charity is having to make incredibly difficult decisions regarding its future.

“Before Covid-19 hospice funding was insufficient, with hospices across the sector receiving on average only enough funding to cover one third of their costs. Sue Ryder was bridging that gap mainly via its fundraising efforts and its 450 high street shops.

“All fundraising events for the next several months have now been cancelled. While our shops are currently still trading we are unsure how long this will continue.

“In addition we are willingly facilitating requests from our NHS partners to plan to care for additional patients in order to free up hospital beds as Covid-19 spreads.

“As a charity with over 1,000 doctors and nurses providing compassionate, expert care for people going through the most difficult times of their lives, we know that we are needed now more than ever.

“This is a plea and no less. Without immediate funding from the government the critical end of life care that Sue Ryder provides to thousands of families across the UK every year will cease.”

The Children’s Society: 'As every day goes by we are spending vital resources without any certainty about the future'

Mark Russell, chief executive at The Children’s Society said: “The government has recognised the critical role we play in supporting the most vulnerable children and young people in the UK by identifying our frontline as key workers during this crisis.

“This includes young people who are at risk of abuse, neglect and poverty and who no longer have the support and stability that regular school provides in their lives. Recognising our vital role urgently needs action as well as words.

“Our teams are working tirelessly to reconfigure our services, to comply with government advice, but support some children who are really at risk.  We face a significant drop in income at the same time as trying to coordinate our efforts when our team is now mostly working at home.

“As every day goes by we are spending vital resources without any certainty about the future. Right now, we need the government to show they are with us, all of us, and won’t forsake our work and the children and young people we support. Regardless of size, charities need to know they have financial support to keep the lights on and help those most in need.”

Cancer Research: 'We are planning for different scenarios'

Michelle Mitchell, chief executive of Cancer Research UK, said: “This global pandemic is going to cause significant strain on the charity sector in the coming months. While our priority is to ensure that people affected by cancer get the support and information they need during unprecedented times, we’re having to work quickly to understand the impact the pandemic will have on Cancer Research UK’s fundraising. 

“We are planning for different scenarios and will do all we possibly can to ensure that our life-saving work continues. But what’s clear now is that charities across the country really need support from government to ensure that our life-saving work can continue.”

 

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