Charities need to ‘meet challenges head-on’ says Norwich financial expert

Mark Proctor from Lovewell Blake says there are things trustees can do to help charities through the coronavirus crisis Picture: Lovewell Blake (Image: Archant)

The government’s announcement of a £750 million cash boost for Britain’s charities in the wake of the coronavirus crisis is welcome. Around half that amount will be distributed to larger national charities directly from government departments, while the remainder is aimed at smaller charities, most of which will come via the National Lottery Community Fund.

This will be something of a lifeline for charities, many of which are facing the double whammy of a squeeze on their ability to fundraise, and a huge increase in demand for their services. As we await the details of how charities can access this funding, there are other things which they can be doing to face the challenge right now.

The first is that trustees need to be looking at the charitable objectives of their charity and considering whether activity can be adapted within them to tackle the particular needs thrown up by the crisis. Changing a charity’s objectives is a complex process which may need the permission of the Charity Commission, so making existing objectives fit is a better option.

Financially, you should consider how you can use reserves and restricted funds. In the current crisis, many funders such as trusts and local authorities are relaxing restrictions on how funding can be used, in some cases removing them altogether. This can significantly ease the immediate cash position, so it is worth going back to such funders to explore if restrictions can be loosened.

Another important issue for trustees is governance: while charities are having to postpone AGMs, their boards still have a responsibility to manage them and ensure that reporting remains robust. If you are using reserves to plug the gap, you may need extra wording in your annual accounts.

The current crisis is not an excuse for trustees to overlook this important aspect of their role, and this includes the need to review whether the charity is solvent and viable – and engaging with the Charity Commission if they believe it may not be. There is some useful guidance on the government website here.

The government help will be useful, but it can only be part of the solution. Trustees need to be proactive in ensuring that their charities meet the challenges head-on, safeguarding their organisations, and above all delivering on their charitable objectives in this uncertain new world.