Funding for charities during these rainy days
Last updated 13 May 2020
The key issue facing a number of charities at this time is how to continue delivering much-needed services whilst suffering from a sudden fall in income.
An Institute of Fundraising (IOF) survey predicts that charity voluntary income will fall by an average of 48% because of Coronavirus. With traditional sources of funds on hold, charities need to look elsewhere. The simple one is to ask, use social media platforms, and talk to the local media. Be open and honest about the situation you find yourself in and the impact to your beneficiaries if you cannot continue.
A number of funders have set aside funds to support charities affected by the Coronavirus crisis. Look at the various grants that are available. If you don’t submit applications you can’t access the funding, but do read the criteria to avoid wasting time.
The National Lottery Community Fund has already said that it will divert its next six months’ funding to deal with issues caused by the crisis. The National Heritage Lottery Fund has launched a £50m emergency fund, as have many local community foundations.
Legacy income is also expected to fall as share values and property values fall. If you are aware a legacy is coming to you, keep in touch with the solicitors to get an understanding of timing. Unfortunately, in the current environment receiving probate may be slow and realising assets will take longer, but if there are funds available they may be able to make a payment on account.
Consider making assets work for you. Charities are eligible for the government loan scheme but you should consider if you could get a mortgage secured against your property. The lenders will want cash flows and budgets which will be a challenge but start discussions with your bank sooner rather than later. When budgeting, approach it in short bites, say the next three months and then the next three months and clearly show all assumptions.
If you rent your property, approach the Landlord to ask for rent deferral or possibly a rent holiday, although they are under no obligation to provide these and may depend on their own circumstances. VAT payments can be deferred and speak to HMRC if you have problems paying PAYE liabilities.
Consider talking to your local council if you operate in the social care sector as there may be funding available to them for you to spend in this area.
Are all your gifts aid claims up to date? The Charity Tax Group have put forward a proposal which has now been accepted, that if a charity event was cancelled and the prospective attendee did not want a refund then subject to the usual rules this could become a gift aid payment and hence a claim made. Obviously Gift Aid declarations will be needed for any claim to be made.
The Government has given some support to charities as detailed in previous articles. There is no easy solution but the ‘’re-emergence of society’’ may be a starting point.
If you would like to discuss any of the topics explored in this article, contact Susan Robinson, Accounts and Audit Partner, and Head of Charities and Not for Profit.
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