What is and will be the impact of the current pandemic on funding and fundraising?
- Services will be affected and so where they are funded by grants or contracts, you will need to speak to your funder about expected impacts such as reduced outputs, delays, cost increases and so on.
- The impact to the economy may lead to reduced disposable incomes which would mean people giving less to charity in a range of ways, from one off and regular giving to challenge events.
- Corporate giving is likely to reduce in the short term as a response to economic uncertainty and the fact that a lot of corporate fundraising centres around employees fundraising at events and in workplaces.
- Income from fundraising events is going to see a huge drop in the next few months. Hopefully some of this will be recouped later in the year when postponed events go ahead but some events will be cancelled and autumn events will be affected by now clashing with the likes of London Marathon.
- Other community fundraising is also likely to be impacted with people avoiding events and because many community fundraising groups and volunteers are in the older age demographic.
- Trading income will be affected in the same way as other businesses and particularly where it is dependent on footfall, such as visitor attractions and high street charity shops. Although conversely, charity shops often perform well during times of economic retraction and/or uncertainty.
- Philanthropists capable of making major gifts will likely want to do something to help so may be inclined to make an unplanned gift at this time to charities that they already know and are either responding to the pandemic or are under increased pressure as a result of it. However, the caveat is that their own disposable income may have taken a hit, depending on the source of their income and assets.
- I believe that most of your supporters will want to help. We have already seen examples of people donating the money they would have given despite events being cancelled, not requesting refunds for tickets to gala events, people giving the money they are saving by working from home, people giving extra donations because they want to help. There will also be many people who want to do something to help but won’t know what or how. We need to offer them ways they can donate, fundraise or help in other ways.
The number one thing we must do next
The economic climate for charities like yours was already tough enough before this, right? Which is why we know that us fundraisers and charity leaders are a resilient bunch so let’s focus on what we can do now. Despite the potential challenges we face in the coming months, the one thing we must do next is remarkably simple.
I believe the most important thing you can do right now is to speak to your supporters. Be proactive, clear and transparent. Explain what the pandemic means for your charity in terms of delivering your services; looking after your beneficiaries, staff and volunteers; the impact on your financial position; and how you are responding to these challenges.
Fundraising is all about relationships and great relationships are built and maintained with clear communication.
I would start by asking yourself three questions:
- Who is your audience?
- What is your message?
- What is your channel?
You will need to answer these questions for each type of supporter. For example, I would expect to contact some supporters individually by phone and e-mail, while others might be contacted through an e-newsletter or social media, and the message will depend on their type of support.
An example of fundraising communications can be viewed in this table.
Events and individuals
As of Friday 13 March, an increasing number of major events are being cancelled or postponed including the London Marathon and other mass participation events that raise significant sums for charities. For events in Scotland, government advice is now that all gatherings over 500 should be cancelled.
In terms of smaller events, ranging from gala dinners to coffee mornings the picture is mixed and uncertain. Some are going ahead until government advice changes, while others are being cancelled and postponed.
If you do decide to cancel events, Section 11 (Events) of the Fundraising Regulator’s Code of Fundraising practice includes a section on event cancellation and contingency plans, including the possibility of refunding donations.
If you have had to cancel events or third-party events have been cancelled, what can you offer your supporters as an alternative? Can you create virtual alternatives, using social media and video conferencing technology, specific platforms such as Strava for running and cycling or virtual fundraising platforms such as Virtual Athlete and Give Penny?
Whether you can create a virtual version of your event or not, remember that people wanted to support your charity and so will be keen for you to offer alternative ways to do so, even if it’s a simple ask for a donation. Many supporters will step up to help if given the chance.
Mark Phillips of the Blue Frog Direct marketing agency has kindly provided free template letters for an appeal in response to the impact of the pandemic. These templates have been written for arts organisations and hospices but can be used as a starting point and adapted for your charity too:
Trusts and foundations have experienced a big hit to their investments due to the impact on the stock market of the pandemic. This will mean they have a reduced level of both income and capital from which to make grants, however the overwhelming majority of foundations are long term investors. Many will have benefited from strong returns over the last few years in financial markets generally – indeed in 2019, global equity markets were up by 26%. The Foundation Giving Trends research series shows that many foundations choose to maintain or increase their level of grant spend when times are hard, even if their income and capital falls.
The Association of Charitable Foundations (ACF) has been talking to their colleagues in other European countries, to other sector umbrella bodies and to foundations themselves and will be updating a web page with what their members are saying about their response.
The ACF has recognised that the charities supported by foundation will be impacted in terms of how they deliver their services and also in their income generation through fundraising and trading. They share that Italian foundations are looking at extending grants for six months without obligation and in other countries there is discussion on converting existing grants that were awarded as ‘restricted’ for specific projects to ‘unrestricted’ for any purpose in line with the charity’s objectives. Foundations will want to ensure that any changes to existing grants are made in accordance with governance requirements and that the receiving charity accounts for any change to funding correctly.
The London Funders Network has issued the following statement of support with four commitments to help grantees. Around 90 funders (not just in London) have signed up to these commitments so far. You can see the full list here.
“We, along with a wider group of funders, recognise that the Covid-19 outbreak is an exceptional event that will have an impact on civil society groups, and want to offer reassurance that we stand with the sector during this time. We wish to be as helpful as possible during the coming weeks and months so that civil society groups can focus on the vital work of supporting some of the most vulnerable people in our communities. We understand that there will be times when staff and volunteers will not be available, when beneficiaries may need services to be provided in different ways, or when systems need to be flexible to ensure that needs are met.
“If your community, services or organisation are affected by the Covid-19 outbreak, and you receive grant* funding from us, we are committed to:
- Adapting activities – we recognise that you may experience difficulties achieving some of the outputs or outcomes we agreed for your grant during the outbreak, and would like to be able to maintain our grant payments to you at originally-agreed levels during this period, so please have a conversation with us if you are affected in this way;
- Discussing dates – we don’t want to add pressure, so if you think you will struggle to meet a reporting deadline please get in touch with us so that we can agree a more realistic time for you to get things to us wherever possible;
- Financial flexibility – we know you may need to use your funding to help cover sickness, purchase equipment, or deliver services differently, and we will be reasonable if you need to move money between budget headings to ensure your work can continue; and
- Listening to you – we are here if you want to talk to us about the situation you’re facing, but we’ll wait for you to call us so that these conversations are at the right time for you.
“We also recognise that there may be further shocks to the system caused by Covid-19 that may impact on your other income streams, or require a more urgent response from funders. Where we have any news on emergency funding, we commit to publishing this on the London Funders web page so you can see all available programmes in one place.
“This statement is being coordinated by London Funders, but is not only for their members or funders in London. If your organisation would like to sign this statement, please get in touch at [email protected].
“*This does not apply to commissioned services or contracts where there will be separate discussions between commissioners and provider organisations.”
Other funders have made their own statements along similar lines, including our local Community Foundation.
The Lottery funders have each issued statements of support, which vary with some being more specific and helpful than others, but we understand that they will be in touch directly with their grant holders on an individual basis.
In summary it looks like most grant funders will be very understanding in their expectations of their grantees and many will attempt to stick to business as usual as much as possible in their grant making. However, it seems inevitable that there will be some that reduce or delay their grant making due to the impact on their investments and ongoing uncertainty.
As you continue to seek grant funding for your ongoing work, to meet the increased demand caused by the pandemic and/or to replace other income, the strength of your case for support is going to be more vital than ever with funders likely to be looking for evidence of the need, urgency and impact of your work more than ever.
There may be measures from the government that help your organisation but so far the focus has been on businesses, without specific mention of charities. If your organisation is a limited company as well as a registered charity, then you may already qualify for such support.
The sector’s national infrastructure bodies have urged the chancellor to implement measures to support the sector including the following:
- Immediately establishing an emergency fund to support charities at risk of insolvency or significantly lower levels of fundraised or trading income due to economic disruption. Ideally this would provide light-touch grant funding but it could also supply interest free, short-term loans if the terms were permissive and the application processes were simple and quick to navigate.
- Implement immediate short term tax deferments or temporary waivers (for example VAT) to help charities experiencing cash flow crises to stay solvent. Tax bills are often one of the biggest challenges facing charities with cash flow problems.
- Explicitly include charities, social enterprises and other social organisations in any economic stimulus packages and measures offered to support the business sector as part of the government’s response to coronavirus or its aftermath and to consider the potential longer term impacts of the short term hiatus.
What has already been announced for businesses is:
- A new Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will enable businesses with a turnover of no more than £41m to apply for a loan of up to £1.2m , with the government covering up to 80% of any losses with no fees. This will unlock up to £1bn to protect and support small businesses.
- For businesses with fewer than 250 employees, the cost of providing 14 days of statutory sick pay per employee will be refunded by the government in full. This will provide two million businesses with up to £2bn to cover the costs of large-scale sick leave.
- A dedicated helpline has been set up to help businesses and self-employed individuals in financial distress and with outstanding tax liabilities receive support with their tax affairs. Through this, businesses may be able to agree a bespoke Time to Pay arrangement. If you are concerned about being able to pay your tax due to Covid-19, call HMRC’s dedicated helpline on 0800 0159 559.
- There will be a £3,000 cash grant to 700,000 of our smallest businesses, delivered by Local Authorities, and worth a total of £2bn. [The process to apply is not yet stated]
- Finally, the government is temporarily increasing the business rates retail discount in England to 100% for 2020-21 for properties below £51,000 rateable value.
As you will know there is a lot of information and advice being provided in relation to Covid-19 and it is constantly changing so it is challenging to stay on top of things.
NCVO has a helpful page they are keeping up to date, which covers key points and shares links to key info sources for government and NHS advice, sector specific advice, risk management and travel advice.
In the coming days and weeks there will be a lot more information and advice being shared by a wide range of organisations. For funding and fundraising specifically, we will continue to monitor updates from:
- The Institute of Fundraising
- The Fundraising Regulator
- COVID 19 Charity Preparedness Group
- Fundraising Chat
- Also, the Institute of Fundraising has opened its member-only email service to all fundraisers who want information, signposting, or support: [email protected]
If you would like to speak to me personally about any of this, please do get in touch directly on [email protected]