Charities set to lose £4.3 billion in funding due to coronavirus

The UK’s charities are set to lose out on £4.3 billion of funding over the next 12 weeks, as events are cancelled and their shops are forced to close their doors in response to the coronavirus outbreak.

Many small to medium-sized organisations are facing imminent collapse unless the Government steps in
with a support package, the sector has warned.

The UK charity sector employs about 900,000 people in paid positions, and many expect to be forced to make redundancies before the Covid-19 crisis is over.

As well as lost funding, many charities are facing a rise in costs as the pandemic leads to a surge in demand from the people they were set up to assist.

Heidi Travis, chief executive of palliative care charity Sue Ryder, said the organisation was having to make some “incredibly difficult decisions”.

She said that before the pandemic, hospice charities only received enough government funding to cover about one-third of their costs, with the remainder raised through charity shops and events.

Ms Travis said the charity was working with the NHS to free up hospital beds for coronavirus patients, but has been forced to cancel all fundraising events for the next three months and expects to have to close its shops.

“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,” she said.

Mark Russell, chief executive at The Children’s Society, said the charity was expecting a spike in the needs of its clients as vulnerable children no longer have a sanctuary in school due to their closure.

“As every day goes by we are spending vital resources without any certainty about the future,” he said.

A coalition of organisations representing the third sector is now calling on the Government to provide emergency funding for charities and volunteers that are supporting the response to the coronavirus.

It is asking for particular support for organisations alleviating pressure on the health service, or helping those suffering from the economic and social impact of coronavirus.

It is also calling for a “stabilisation fund” for all organisations, regardless of their function, to prevent their collapse.

Lastly it wants confirmation from Chancellor Rishi Sunak that charities should be eligible for the same business interruption measures previously announced for the private sector.

Karl Wilding, chief executive of the National Council of Voluntary Organisations, 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.”

He added: “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.”

The sector is calling for clarity on whether they would be protected from action if they were to default on loan repayments while social isolation measures are in force.

It also wants guidance on whether charities who generate the majority of their income through trading will be eligible for the business interruption loan scheme.

Charity shops already receive 80% relief on business rates, but sector bodies want to see this relief increased during the pandemic.

Vicky Browning, head of the Association of Chief Executives of Voluntary Organisations, said: “Charities need swift, simple and substantial funding now. The government’s promise to do ‘whatever it takes’ must include charities.”

Caron Bradshaw, chief executive of the Charity Finance Group, said her organisation had helped charities diversify their funding models and retain reserves but added that the current situation is “unprecedented”.

“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,” she said.