UK Coronavirus (COVID-19) support for the charity sector

Christina Nawrocki FCCA outlines the financial support available to charities during the COVID-19 outbreak.

Some welcome potential relief for those in the charity and not-for-profit sector! The Chancellor announced a £750 million package of coronavirus support for those supporting the vulnerable and providing key services during the lockdown.

This came following the lobbying efforts by The Chairman of the Charity Tax Group (CTG), John Hemming, to request immediate support for charities through the tax system during the COVID-19 pandemic.

There have been many calls for help by charity retail outlets who have faced a perfect storm during the coronavirus outbreak. It has resulted in an all time high in demand for many services, while donations have dried up, and volunteers have been forced to stay at home in self isolation.

The grim reality was presented by The National Council for Voluntary Organisations forecast, prior to the announcements, that the charity sector would lose £3.7bn of income over the proceeding 12 weeks!

What the support for charities entails

The Chancellor's measures come in addition to allowing charities to access much of the government support made available to businesses. These include:

• Deferring VAT bills
• Shops paying no business rates for the next year
• Furloughing of staff through the Coronavirus Job Retention Scheme where the Government will contribute to 80% of staff wages up to £2,500 per month

• Hospices that help increase capacity for the NHS and give stability to the sector (up to £200m)
• St Johns Ambulance in its work for the NHS
• Victims charities, including domestic abuse, to help with potential increase in demand for their services during the outbreak
• Vulnerable children charities, so they can continue delivering services on behalf of local authorities
• Citizens Advice to increase the number of staff providing advice during this difficult time

Small and medium-sized charities

In total, £370 million has been allocated for small and medium-sized charities working at the heart of local communities which are making a big difference during the outbreak, including those delivering food, essential medicines and providing financial advice. In England, this funding will be provided through organisations such as the National Lottery Community Fund, with a grant application scheme to be opened.

Tens of thousands of charities providing vital services will benefit from direct cash grants. This is to help them meet demand as a result of the virus while continuing their day-to-day activities to support those in need.

In an additional pledge of support the government will match fund whatever the public donates to the BBC’s, The Big Night In charity appeal on 23 April 2020. This will start with a contribution of at least £20 million to the National Emergencies Trust appeal.

When will all this be available? Some criticisms

The way it will work is government departments will identify priority recipients, with the aim for charities to receive the money in the coming weeks.

The application system for the National Lottery Community Fund grant pot is expected to be operational within a similar period of time.

This may be an important boost to many charities, but it is not the comprehensive package that many were hoping for. Barnardo’s chief executive, Javed Khan, and Vicky Browning, chief executive of the Association of Chief Executives of Voluntary Organisations have been critical. Their opinion is the funding doesn't go far enough with likely charity closures harming not just their workers but vitally, the people they support and help. 

Like many of the other government packages it's possible details will be clarified and extended in the coming weeks. It is hoped this could provide a more wide ranging approach to help other charities that are on the brink of collapse.  

The content of this post is up to date and relevant as at 16/04/2020.

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