COVID-19 is creating unprecedented challenges for the charity sector, as these organisations which work at the very heart of our communities, face pressures across several fronts.
At a time when the charity and voluntary sector is seeing even greater demands for their vital services, these same organisations are facing a potential decline in fundraising caused by such reasons as the cancelling of a number of events that would usually provide vital donations.
Just as businesses attempt to navigate their way through the latest guidance, charities must adopt this same proactive approach to ensure they can continue their essential work.
The Charity Commission has provided new guidance, which comes in response to an influx of questions from the sector upon which it regulates.
The full detail can be found here, but we have handpicked the most pertinent points to feature in this email, which can be found below.
How do I gain support to pay my charity staff?
As per the guidance issued, employers can contact HMRC for a grant to cover most of the wages of their workforce who remain on payroll but are temporarily not working during the Coronavirus outbreak. Any employer in the country, small or large, charitable or non-profit, will be eligible for the scheme.
Can I use reserves and restricted funds to help my charity through the crisis?
Reserves can be spent to help cope with unexpected events like those unfolding at present. Charities need to identify which of their funds or assets have limits on their use. If these are internal only, for example your charity has decided to earmark certain funds for a particular purpose, then you may be able to reprioritise these.
Restricted funds are a little different, which covers any funds that can be spent for a defined purpose only. For example, a fundraising appeal may restrict funds to a specific objective, or if there is a permanent endowment, it may have restrictions on selling it to release funds. There may be ways to amend these restrictions but accessing or releasing restricted funds should only be considered if other options, such as reserves, are not possible.
The Charity Commission encourages careful consideration of the wider and longer-term impacts of making such a decision on the financial resilience and donor relationships. Charities should therefore seek professional advice before progressing. All decisions on such financial matters should usually be taken collectively, and significant decisions and action points noted in writing.
Can I cancel or postpone my charity’s AGM or other key meetings?
Trustees can decide to cancel or postpone their AGM and other critical meetings if it is necessary to do so. They should record this decision to demonstrate good governance, which is particularly important if it is not possible to hold your AGM and may pose difficulties when finalising your annual reports and accounts.
Wherever possible, the Charity Commission would ask that charities do submit their annual reports on time. However, where the situation impacts on the completion of annual returns and accounts, charities with an imminent filing date can call the following support line for assistance: 03000 669 197 (lines are open between 9am to 5pm, Monday to Friday).
Can I use video, teleconferencing and the internet in place of face-to-face meetings?
Trustees must check their governing documents clauses and if these allow to hold virtual or telephone meetings. If not, they may make amendments to facilitate such changes as to how or when meetings are held.
If there is no such clause in the governing document and the Trustees decide to hold meetings over the phone or using digital solutions, then they should record this decision and that they have done this to demonstrate good governance.
What do I need to report to the Charity Commission?
It is ultimately the responsibility of the Trustees to continue to report serious incidents using current guidelines, and the Trustees must use their judgement in deciding whether this is significant in the context of their charity and therefore should be reported to the Charity Commission.
If you have any queries about how your charity could be affected or what action you need to take, then we are on hand to answer your questions.
Please contact your Champion advisor or local Champion office.
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