Government support for charities not enough, warns accountants Kreston Reeves
Published: 17 Apr 2020
The Government announced on 8 April a £750m package of support for ‘front line’ charities affected by the coronavirus. Government grants of £360m will be made available to charities providing ‘essential services and supporting vulnerable people’ with a further £370m distributed to smaller community charities.
The support, whilst welcomed, will not be enough to protect all charities providing front line support, with many facing the very real prospect of having to close their doors or fall into insolvency. That is the stark warning from charity accountants and advisers Kreston Reeves.
Susan Robinson, Partner and Head of Charities at Kreston Reeves, said: “This package of support was not the answer charities were looking for. Many charities that are on the front line – those helping the elderly or vulnerable adults for example – do not appear to qualify for support.
“Charity fundraising has fallen off a cliff, they have seen investments stutter, and face long delays in benefiting from legacies. And with limited reserves, the current crisis will see charities close their doors or face financial collapse at a time when they are, arguably, needed the most.”
Susan adds: “There will be other sources of support available, such as the BBC’s Big Night In event where the Government has promised to match money raised, and charities should look to explore these as soon as they are able. It is, however, unlikely that financial support will reach charities before the end of April. It is a worrying time for charities and their trustees.”
The Government in announcing its package of support, recognised that it cannot hope to help all of the 170,000 UK charities, recommending that they explore the other schemes made available to businesses.
Kreston Reeves offers this advice to charities facing an uncertain immediate future:
Look at cashflows and budgets in bite sizes. 12-month planning can very difficult, but consider the next three months.
Apply for all applicable government funding and to other foundations.
Ask the community for support.
Make sure gift aid claims are up to date.
Review expenditure and cancel unnecessary direct debits.
Try to think of new ways to deliver your charitable objectives.
Hold regular trustee meetings online.
Susan concludes: “There will be life after this crisis and the charity sector will be vitally important. Whilst it will be difficult now, we hope to see you thrive again.”
Susan Robinson is Head of Charities at accountants and business advisers, Kreston Reeves and an experienced charity trustee.