The national Covid-19 lockdown began nearly eight months ago (23 March
2020). Since 5 November 2020, the UK has again been living under a national
Covid-19 lockdown. This month we offer an overview of the charity sector
and the impact that Covid-19 has had on it.
Charities have battled on throughout 2020 but many have experienced
significant negative direct or indirect effects of Covid-19. Some of the
more common effects (which your charity may well have experienced) are:
· increased demand for your services;
· practical difficulties arising from Covid-19 safety issues which hinder
delivery of services by or to the charity;
· staff/volunteer shortages;
· increased financial pressure due to loss of fundraising income, in many
cases across several income streams at once;
· inability to reduce or shed overheads, or perhaps some increased costs;
· loss of donations due to increased charity fraud.
Undoubtedly a substantial number of charities have been or will be forced
to close due to Covid, whether for financial or operational reasons. Others
will continue to struggle but if they cannot find any new source of income,
cannot reduce their costs or achieve efficiencies, they might not survive.
The Charities Aid Foundation’s (“CAF”) reported in October 2020 that
charity donations appeared to have risen by £800million in the first months
of the pandemic, that giving between January and June 2020 was at levels
usually seen in the months leading up to Christmas and that the public had
donated a total of £5.4billion – £800million more than for the same period
Some charities have gained as a result, but many charities have lost out
this year in terms of the total level of donations that they have received
from the public.
The level of donations which the public makes to charities over the June
2020 - May 2021 period remains to be seen, and it may be that donations
will fall away, especially as households increasingly suffer financially or
However, on the positive side, the CAF report shows that the public has
remained willing to support charities as much as it can, and that public
trust in charities has risen, with 56% of people in August 2020 agreeing
that most charities are trustworthy, up from an average of 50% in 2019.
If you would like to read the CAF report (“UK Giving and Covid-19”) in
What can charities do to mitigate their problems?
The Centre for Charity Effectiveness at the Cass Business School is a
leading nonprofit and philanthropy centre in the UK. In May this year it
considered what charities might do to mitigate Covid-19 related problems.
Its views, in summary, were as follows:
(1) Charities understandably work very hard to deliver their services, but
they would need to take early action if provision of their services was to
remain sustainable. That means that they would need to focus on what
activities, given the impact of Covid-19, they would and would not continue
(2) Whilst charity trustees needed to make early decisions about what they
would either stop doing or pare down, they needed at the same time to try
to protect their charity’s core activities. They would have to ensure that
any reduction in activities or resources would not be so severe as to
prevent flexibility or ability to restart activities.
(3) The decisions that needed to be taken might be hard to take, but that
should not mean that they should be put off by trustee boards - quite the
(4) If a charity has strong governance and leadership, with a diverse board
and a good mix of appropriate skills and expertise, it was more likely to
make better and swifter decisions to try to deal with problems arising out
of Covid 19.
(5) The Covid-19 situation had resulted in charities collaborating more
than before with other organisations, and that might bring efficiencies and
other benefits to many of those charities.
Some charities might be able to consider collaborative working or even
possibly merging with another charity in order to reduce costs or achieve
efficiencies. It might be possible to share resources. However, charity
trustees should not take the decision to enter into such arrangements
CAF has produced a survival guide for charities (“Actions to Survive”). If
you would like to read that CAF guide please click here.
H. M. Government has provided some COVID-19 guidance for the charity sector
which you can see by clicking
The November 2020 Covid-19 lockdown
As before, charities are eligible for the re-introduced furlough scheme but
those charities struggling with an increase in demand for their services
will not be able to cope without staff. For them this will mean that the
furlough scheme is of little assistance. Charities with retail shops will
need to close them, another blow to income for them. Face-to-face
fundraising will again have to cease for the duration of the lockdown.
New Simply Docs Charity documents
A number of new documents have been added to the Charity & Non-Profit
portfolio. Some of them specifically address some Covid issues.
Apart from the new Covid 19 related documents the portfolio covers a wide
range including: setting up a new charity; charity constitutions; documents
and formalities needed for day to day running of a charity; trustee board
meetings; trustees’ duties and formalities; charity volunteers; contracts
for charities to acquire services; data protection; safeguarding;
complaints; charity fundraising agreements; charity lotteries (fundraising
raffles); charity grants; gift aid; legacies to charities; commercial
participation and sponsorship; borrowing by charities; hire of premises and
various documents relating to private members’ clubs.
We encourage you to revisit the Charity & Non-Profit portfolio - you
can see it if you click here.
In these straitened times, we think you will find that these various
document templates and guidance notes are a very inexpensive way of helping
your charity deal with some of the legal issues it is facing.
The contents of this Newsletter are for reference purposes only and do not constitute
legal advice. Independent legal advice should be sought in relation to any specific