On 8 April 2020, Chancellor Rishi Sunak announced a £750m package to help struggling charities to try and stay afloat during the coronavirus crisis.
A number of charities are facing collapse, including those local to us in the Reading area, with income decimated because charity shops were forced to close.
Even larger charities such as Oxfam and Age UK have had to furlough two-thirds of their staff.
Mr Sunak also said that the Government wanted to help the charities that were “on the front line of fighting the coronavirus”. As part of his announcement, the Chancellor pledged that the Government would match all donations to the BBC’s “Big Night In” fundraising event on 23 April, pledging a minimum of £20m. He said that, “We need the gentleness of charity in our lives” which has resonated with many in the charity sector.
Out of the £750m package, charities providing vital services and helping vulnerable people through the current crisis will benefit from £360m to be allocated by government departments. These will include hospices to help increase capacity and give stability to the sector.
As a firm, Barrett & Co has been a long-term supporter of Sue Ryder, amongst other healthcare charities. Our Senior Partner, Hilary Buckle, was a finalist in their “Southern Women of Achievement Awards” which were held at Phyllis Court on 13 March. This event was covered in our article here.
Sue Ryder offers a range of services in Berkshire from three sites: Duchess of Kent Hospice, Wokingham Day Hospice and Sue Ryder Palliative Care Hub Berkshire. Members of our Private Client team are experienced in talking to families about end of life care and the legal issues that many families have to grapple with. We are working with Sue Ryder to help individuals coming to the end of their lives, and their families, to sort out their affairs, even during this coronavirus crisis, whether it is to update their Wills or to advise on advanced decisions, amongst other things.
Sue Ryder, like many other charities, is facing a massive funding crisis, and therefore welcomes the Chancellor’s announcement of government assistance. Many within the charity sector, however, fear it will not be nearly enough. Sue Ryder has launched an emergency appeal for funds in a fear that it may have to close hospices and cut back on the number of palliative care nurses.
Before the Covid-19 outbreak, statutory funding covered a third of Sue Ryder’s end-of-life care costs. The rest came from fundraising and income from its 450 charity shops. The cancellation of the London Marathon, which was due to happen on 26 April, cost it £200,000 in lost fundraising and in total it is facing a £12m shortfall in the next three months.
At Barrett & Co, we can help not only with the preparation of Wills and advice on caring for the vulnerable amongst us, we can also advise you if you are a charity trustee and have concerns about the ongoing work of your charity.
If you are worried about your charity’s income and solvency
The Chancellor’s assistance package will take time to filter through the system. You still need to keep your charity’s solvency under review and consider adjusting your strategy to mitigate risks.
Consider relationships with your funders, partners, customers and suppliers to see if there are interim solutions that might be found. Many funders have already announced packages of support so speak to your funders about what they can do to support you. We do not have any specific details yet, but it looks likely that HMRC will be flexible on VAT and other tax payments, so keep an eye on their website as details emerge.
If you are concerned about appropriate staffing levels
If you do not have enough work for your staff, there are a number of short-term measures available to you that may avoid you having to lose people, such as withdrawing or delaying offers of employment, reducing the use of casual or agency staff, overtime bans, and/or requiring staff to take their holiday entitlement.
Some contracts of employment may contain short-time working or lay-off clauses. Even if there is no such provision in the contract, staff may be willing voluntarily to agree to short-term measures such as a temporary reduction in working hours, temporary absence from work, or a temporary reduction in salary.
You may wish to take advantage of the Government’s scheme for furloughed workers, whereby HMRC will reimburse 80% of wage costs up to a cap of £2,500 per month.
Remember to consult with staff and follow your policies in order to avoid breach of contract and/or unfair dismissal claims. Depending on the number of staff involved, it may be necessary to follow a statutory consultation process. Whatever happens, close communication with staff is going to be key over the coming months given the speed with which situations might change.
If you need any help with this, please contact Justin Sadler at [email protected] or on 0118 958 9711. Justin would be pleased to advise you on any aspect of employment law and dealing with your charity’s employees.
If you are struggling to pay your rent
Failure to pay rent will usually entitle your landlord to ‘forfeit’ your lease. Most landlords, however, will not want their properties to be vacant at this time, especially given they may become liable to pay business rates on their premises.
You should speak to your landlord as soon as possible to try and negotiate a temporary solution. This could include switching to monthly or weekly rather than quarterly payments to manage cash flow, or a temporary rent-reduction, or a rent holiday/deferral.
If your AGM cannot go ahead or you are concerned about board meetings
If your charity is a membership organisation, we advise you to check your governing document to see whether it allows you to postpone or cancel an AGM once formal notice has been served, or what happens if an AGM is required to be held in the next few months. Perhaps you could hold the meeting electronically, by post or by using proxy voting. It would also be advisable to check whether trustees remain validly appointed, as many charities have a mechanism for trustees to retire automatically at an AGM.
In relation to board meetings, again we advise you to check your governing document for any specific provisions about holding virtual meetings and making decisions in writing. Consider whether you could hold an electronic meeting, at which everyone attending is able to hear everyone else and contribute effectively. You can also execute documents electronically as long as the formalities for executing the document are satisfied. It is more important that meetings continue to be held and that trustees continue to exercise oversight, even if electronic meetings may not be technically valid. Decisions taken in good faith are unlikely to be challenged and can be ratified at future meetings.
If you have a fundraising event planned
Based on current Government advice, you will probably need to cancel the event depending when it is due to take place. If you do, you may have to refund donations which have already been made. In those circumstances, you will need to check the terms on which the donation was made and if necessary speak to donors to ask whether they are happy for their donation to be used for other purposes. If you are returning donations, you may need the prior consent of the Charity Commission. Consider whether it might be feasible to postpone the event instead, and make sure you have a communications strategy in place.
If you are not sure whether your losses are insured
Check the wording of your insurance policies to see what is covered and what is not. It is becoming apparent that many “business interruption” policies have very limited application in the current circumstances. Does the policy cover “notifiable infectious diseases”? Does it exclude epidemics or quarantines? Do you have to have suffered property damage in order to make a claim? If you are considering taking out an insurance policy now, check the small print carefully before signing up, and be aware that policies covering coronavirus risks may be expensive.
Further information and guidance
The Charity Commission has recently updated its coronavirus guidance which includes advice about using reserves and restricted funds, postponing or cancelling meetings, reporting serious incidents, keeping people safe, and working with a company or business to help with coronavirus, amongst other things.
Get in Touch
If you have any concerns as a charity trustee, or would like any help or advice about any aspect of your charity, please contact Jane Whitfield at [email protected] or on 0118 958 9711.