COVID-19: Updated guidance for charities

The coronavirus outbreak has put an enormous amount of pressure on organisations throughout the UK, charities included. Charities are finding themselves in increasingly difficult positions, as events are being cancelled or postponed, significantly effecting funding and future donations. Although Michael Gove has already stated that funding for the sector will be announced in the coming days, The Charity Commission have assured charities that they are adopting a flexible and pragmatic approach in these uncertain times with sector specific guidance being issued. Here is a summary of what we know so far:

Support to pay staff

Like other UK businesses, if your charity has had to halt operations due to the COVID-19 outbreak, you may be eligible for funding, to pay 80% of furloughed employees wages. Further details on furloughed staff can be found here.

Reserves

Using your charity’s reserves might be a suitable option to help you deal with the unfolding crisis, if you have been left in an uncertain position. However, before doing so, your trustees need to evaluate both short and longer term priorities. The commission have recommended that you assess whether or not upcoming projects and activities can be postponed or stopped entirely, meaning that your organisation has some leeway to focus on essential spending.

Restricted Funds

Funds that have been given to you for a particular purpose should ideally be avoided. Restrictions on these funds can only be lifted if all other options are not available to your charity, including the spending of reserves. Even then it might not be possible.

If you’re considering doing this, it’s important to seek professional advice, as it could have long term implications on your organisation’s finances and the relationships which you have developed with your donors. The Charity Commission have noted that they will offer as much help and guidance as they can on this particular issue.

AGMs and Key meetings

Following the government’s advice on social distancing, it might be necessary to cancel or postpone any upcoming meetings, including your AGM. This decision should be made by your board of trustees. If you do decide that this is a necessary course of action, you must record this decision, to reflect how your charity is being governed, especially if you’re not able to hold your AGM. Video calls and teleconferencing might be the go-to means of substituting face-to-face meetings.

You should check your governing documents to see if you have clauses which allow you to hold virtual meetings. If there’s no clauses in your documents, but you still decide to go ahead with virtual meetings, you should record this decision, again to show that you are governing your charity well.

Deadline delays

The coronavirus may effect your staff and trustees, so if the situation makes it impossible to file your annual returns, you should contact the Charity Commission directly to ask for an extension. The contact details can be found here. However, if it is at all possible, you should still aim to get your annual reports and accounts to the Charity Commission on time.

Serious incidents

The Charity Commission have urged trustees to continue to report serious incidents in accordance to their guidelines. That being said, they have retracted their statement stating that charities are required to do so. Trustees should use their own judgement to decide whether an event is significant enough to be reported, such as a fire or theft. If individuals are at risk, or if the charity’s operation has been harmed by an incident, the commission will still continue to prioritise such incidents.

Public safety

Now more than ever the health of the public is being called into question. Even though the pandemic is inspiring people help one another and volunteer, the safety of the public remains critically important. You should ensure that your staff, beneficiaries and volunteers remain protected in these unprecedented times, especially if you are helping those who are vulnerable or self-isolating.

SORP

The Charity Commission have updated their guidance on accounting standards. Although there are no amendments to the SORP, the updated guidance considers COVID-19 may have implications on financial reporting, going concern and annual reports. Full details can be found here.

Update: April 9th 2020

Last night Rishi Sunak announced a £750m support package for charities during the unfolding crisis. The funding will hopefully help ensure that charities can continue their work during these unprecedented times. This will provide some welcome relief to charities who have found themselves in unsure positions during the COVID-19 outbreak.

£360m of this support will be allocated to organisations who are helping particularly vulnerable people and to those who are providing key services. A further £370m will be given to smaller charities, who play significant roles in local communities. Sunak also revealed that the government will be matching the amount raised throughout the BBC's upcoming fundraiser 'Big Night In'. You can find further details about the announcement here.

How can we help?

We know how difficult and uncertain these times can be. We are here to talk and support your charity in anyway we can. Get in touch or directly contact your Relationship Manager for further guidance.