Charities face a grim future and even the threat of closure over the next couple of months if they’re not helped urgently and given funds to stay afloat, many are warning.
Thousands of charities are in a difficult position and are appealing for funds from the public or face bankruptcy as fundraising events are cancelled or postponed and donations reduce or dry up, thanks to the coronavirus outbreak.
Their financial difficulties are set to scupper ability to provide vital services to the public as the coronavirus takes hold, the Charities Aid Foundation claims.
Across the country, charities are losing out on millions of pounds as they find themselves unable to operate the during peak fundraising season which typically starts last month and ends in September.
Last year during the peak fundraising season (March – September) charities generated around £435m in donations but during the 2020 coronavirus pandemic many are facing closure as donations dry up
It’s during this time that charities generate the most income for the vital causes they support such as poverty, rescuing animals or providing end of life care.
YouGov estimated that between March and May 2019, £435million was donated to charities through sponsorship.
The London Marathon, due to take place on the 26 April this year but which has now been postponed to 4 October, raised £66.4million for charity alone last year.
Major losses being faced for charities
A survey by CAF of 271 charities taken late last month found 37 per cent saying they would not be able to operate in their current form for six months without extra help – either from the government or elsewhere.
Fundraising shortages mean that some charities are now making use of the government’s job retention scheme – known as furloughing.
CAF’s figures found that 26 per cent strongly agree that they would need to make use of this scheme but the concern is that 47 per cent have pointed out that it doesn’t apply to them because they need their staff now more than ever, in spite of income streams drying up.
Ceinwen Giles, director of partnerships and evaluation and co-founder of Shine Cancer Support feels that charities should be able to continue to work while furloughing staff.
‘Once you’re furloughed you can’t do any work for an organisation but obviously for us we don’t generate an income but support young adults with cancer.
‘We are not only worried about our income but what we can do for beneficiaries.
‘Cancer doesn’t stop because of Covid-19. People are still being diagnosed and are struggling to get the same level of care.
‘Not that the doctors don’t want to provide it but it’s obviously a tricky time.
‘As a typical small charity we looking at a £90,000 hole in the budget.
‘But for us that’s the difference between paying our staff, surviving or not.
‘A lot of the charities that are really struggling aren’t making tens of millions but tens of thousands and that’s dried up.’
We closed 14 shops and lost £500k in the process
The Heart of Kent Hospice has had to cancel its charity Bluebell Walk which it’s had for 30 years and has generated a lot of vital financial aid for the charity
Sarah Pugh, Heart of Kent Hospice chief executive, says the charity has had to shut 14 shops which overall generate half a million pounds.
She told This is Money: ‘We’ve had to shut but the costs still continue as we’re furloughing our teams and paying rent. We’ve had to cancel or postpone all our events.
‘A grant from the Government is 20 per cent of expenditure but the rest all comes from community fundraising but that has all been impacted by the coronavirus and most has vanished.
‘Companies who’ve previously supported us have gone into survival mode and haven’t been able to offer as much as they used to. But what has been amazing that they’ve tried to help in other ways.
‘Every month we’ve had to raise £324,000 and that has just come to a halt. Until life has come back to normal we don’t expect to see those levels for a considerable amount of time.
‘We launched our emergency appeal yesterday to donate whatever they can in a way they can.’
Fewer people can give
Besides losing money from events being cancelled or postponed, charities are also losing money from the public as some lose their jobs or see a reduction in income.
When CAF asked people about their willingness to give more to charity as a result of coronavirus only five per cent said they were likely to donate more, while 17 per cent said they were somewhat more likely (22 per cent overall).
Conversely, 15 per cent of people said they would donate less to charity than they normally do.
Susan Pinkney, CAF’s head of research, adds: ‘Like every other facet of UK life, charities are struggling to keep their doors open and deliver crucial services.
‘These results tell us that a lot of the smaller charities that help in communities around the UK may not be able to keep going. Some of them told us that timing amounts to a matter of weeks.’
We’re trying to get loyal subscribers and sell in store
The Big Issue vendors normally sell the social enterprise’s magazine on the street but as they can no longer do so they’re now being sold in stores
The Big Issue, a social enterprise, had no choice but to stop its 2,000 vendors selling its magazine on the streets to get an income last month. To help them it has instead appealed to the public to sign up to the magazine as subscribers and is also selling copies in Sainsbury’s and McColl.
The magazine is being sold in the stores for £3 and 50 per cent of the net proceeds will be going into their vendor support fund.
Ruth Law, spokesperson for The Big Issue says: ‘We need 60,000 people to subscribe for three months. We’ve got less than we normally do but the regular subscribers would help us with the lost income.’
Support is still not enough
A number of larger charities, banks, councils, other organisations and individuals have stepped in to offer financial support to struggling charities.
CAF itself has created a £5million Coronavirus Emergency fund which will offer one time grants of up to £10,000 to small charities, organisations and social enterprises, while the National Emergencies Trust in partnership with the British Red Cross’ fundraising appeal has now raised £16million.
Others that have stepped in include The Arts Council and Third Sector Resilience Fund (Scotland) who’ve donated £160million and £20million respectively.
Meanwhile the Steve Morgan Foundation Covid-19 Emergency Fund has pledged £1million a week for charities and on-profits working across Merseyside, Cheshire and North Wales for an initial 12 weeks.
However, this is still not enough. A spokesperson for CAF says: ‘Our fund was created from money that was given to CAF for this kind of event which we are deploying. But we’re massively oversubscribed and will probably have to pause applications very soon.
‘The need far outstrips what’s currently available despite the very generous support given by companies and people so far. It’s tough and there’ve been some amazing donations but the consensus is that it’s still not enough.’
We’ve had to furlough our staff
Ceinwen Giles, director of partnerships and evaluation and co-founder of a small charity called Shine Cancer Support says she has seen a major dip in donations.
She explains: ‘We get most of our donations because of mass participation events like London Marathon and lots of runs and activities and all these events have been cancelled.
Ceinwen Giles, director of partnerships and evaluation and co-founder of a small charity called Shine Cancer Support has had to make some difficult decisions and furlough some staff
‘No one is allowed outside so we are struggling to come up with other events we could do. We don’t have large grants or rich private donors, we are a small charity and have four full time staff and one part staff.
She adds that the charity has had no choice but to furlough some of its staff. ‘We just this week furloughed two staff and I am looking at being furloughed next week and two others will be put on 80 per cent income.’
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