Charities waiting for government support warn of 'imminent collapse'

By agency reporter
March 24, 2020

Charities across the country are facing imminent collapse as fundraising income dries up, charity leaders have warned.

Charities have been in conversation with the government about a package of support for the charity sector, but warned that without an urgent injection of money many charities of all sizes would start to close their doors as soon as this week.

With charity shops closed and fundraising events and activity cancelled, reserves depleted and demand for services increasing, charities are having to make immediate decisions about their financial viability. 

Charity sector bodies have made initial estimates that charities will miss out on a minimum of £4.3 billion of income over the coming 12 weeks, though the figure could be far higher. Many will also face increased costs as part of their role in tackling the outbreak.

Many charities would normally expect to make significant proportions of their income from public fundraising events in spring and summer.

Charities have asked for commitments from the government including:

  • emergency funding for frontline charities and volunteers supporting the response to the coronavirus crisis, especially where they are alleviating pressure on the health service or providing support to people suffering from the economic and social impact of coronavirus
  • a ‘stabilisation fund’ for all charities to help them stay afloat, pay staff and continue operating during the course of the pandemic
  • confirmation that charities should be eligible for similar business interruption measures announced by the chancellor for businesses.

Karl Wilding, chief executive of the National Council for Voluntary Organisations, which represents charities and volunteering, 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.

"Many charities are helping in the current crisis to alleviate pressure on the health service or providing support to people suffering from the economic and social impact of coronavirus. 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.

"I know the government is working on this but for many charities around the country there is very little time to spare."

Vicky Browning, chief executive of ACEVO, said: "Charities of all sizes – from local community groups to our well-known national organisations – are a vital part of our country’s response to this crisis. But the voluntary sector cannot do what it does best if it has gone bust. Charities need swift, simple and substantial funding now. The government’s promise to do ‘whatever it takes’ must include charities."

Peter Lewis, chief executive of the Institute of Fundraising, said: "Charities will have planned on raising millions of pounds which is going to be irrevocably lost because of the impact of coronavirus. The cancellation of high profile events such as the London Marathon, as well as thousands of smaller events run by local charities across the country, closure of shops, and a halt on public fundraising activity have already caused huge problems for charities who quite simply can't plug the gap in such a short time. 

"Spring and summer is a key time for fundraising, and without the right support from the government right now to mitigate the lost millions of pounds, many charities, and the services they run are at threat."

Caron Bradshaw, chief executive of the Charity Finance Group, said: "We have encouraged charities to diversify their funding models over the years and retain reserves on a risk basis. But this situation is unprecedented in attacking every area of charity income, whilst increasing demand and costs, and is rapidly burning through reserves.  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."

* National Council for Voluntary Organisations https://www.ncvo.org.uk/

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