Managing charity finances during the Coronavirus

The Charity Commission has recently published guidance for charities about managing financial difficulties caused by coronavirus.  This is a useful overview of the things that charities should be considering to try and protect their financial health.  

There are also some useful links to other organisations that have further guidance or detail the support that is available to the sector.

The advice suggests a three-stage process that charities should go through:

1. Consider your current financial position – essentially this is ensuring that you have a very clear understanding of your cashflow in the coming months and that you have identified any other assets that could be converted into cash if needed.
2. Minimising costs and protecting and increasing income – this all sounds very obvious, but is a good reminder to talk to your funders and to be open to other opportunities to generate income.
3. Keep the charity’s operations and finances under regular review and take any additional actions – this advises continual review of finances and then explains what you should do if it becomes clear that the charity will not be able to continue.

Unfortunately, this final point is likely to be relevant for some charities.  

The NCVO has estimated that the sector will lose £4.2bn of income, whereas the government has provided a support package that is worth £750m.  

Many charities have been very creative in generating additional income and many funders have been incredibly supportive.  

These steps are helping to keep the sector going, but unless things return to some sense of normality then there will be some casualties.  

Oliver Dowden, the Culture Secretary, has stated that the government will “not be able to save every single charity” and therefore many charities will need to take decisive action to save themselves.

If you would like to discuss how we can help your charity, please contact a member of our Charity team.