surgical gloves

Behind the figures

What has been the impact of the coronavirus crisis on larger charities?

By Theo Clay 18 June 2020 4 minute read

The treasury probably thinks that the combination of all their different pots means charities are able to sleep easy, but when I look at our cash flow, none of it has made any difference yet.

Those of us who write about charities are running out of synonyms for ‘crisis’. Only by ringing alarm bells can charities secure emergency funding, and for many organisations the harsh effects of this crisis continue to be a daily reality.

To claim, however, that every organisation is in immediate need of massive assistance is not entirely true. It distracts us from those who genuinely are, and from the latent needs of many other charities.

Many charities are instead stuck in a state of purgatory—worried where they will end up once, and if, their indulgences are granted. The furlough scheme has delayed difficult staffing decisions and there is growing concern around a range of ‘hidden needs’ which are going unrecognised and unreferred because of a lack of face to face contact. Moreover, the full economic impact of the coronavirus crisis will almost certainly cause a subsequent rise in need across the country.

A look into the impact of the coronavirus crisis

In this context, we at NPC were asked by the Gatsby Foundation to take a closer look at what the impact of the crisis was likely to be on the finances of 27 of the largest Covid-relevant service delivery charities in the country. Therefore allowing clear asks to be made of the Treasury. The funding already announced by the government is only a small fraction of what NCVO calculated the sector would lose as a result of Covid-19, and it hardly even covers the needs of the 27 charities we looked at. Without these funds, there is a real risk that charities can’t deliver for the people who need them.

From the Treasury’s perspective, the strongest case for funding these organisations comes from clear, impartial, evidence of the details of financial need across these charities. To get this, we developed a model, which we populated with data from the financial accounts of the 27 service delivery charities, to ascertain the impact of the crisis on them, and did follow-up interviews with as many of these charities as we could. More details about our focus on the financial accounts and our wider approach will be published soon.

Differing experiences in the sector

The findings on the projected financial shortfall were worrying yet predictable. On closer inspection, however, there were stark differences between the 27 charities we looked at. Some organisations were not facing any form of shortfall, whilst others were. These differences were dependent on what type of income model the charity had. Service delivery charities fit into four broad categories—legacy fundraisers, contract deliverers, public fundraisers, and charity traders. In the short term, charities whose income models were dependent on government contracts were by and large comparatively better off than those whose income was dependent on charity shops, training or other forms of commercial activities which cannot go ahead at this time. Legacy and public fundraisers were also seeing drops in income, though not as immediately severe.

Behind the figures

More interesting and unexpected, are the stories behind these figures. For example, many organisations have been relieved to find that they can deliver their services relatively well online. However, those who are reliant on contracts are already concerned about the implications of this becoming the new normal. The long-term effects on beneficiaries of online delivery compared to face to face delivery are still relatively unknown. As commissioners look for ways to cut costs, some charities are worried that they will be pressured to continue this quick-fix delivery model indefinitely.

I’m not sure [online delivery] is totally a replacement though. We worry that commissioners might turn around and insist on a lighter touch model in future and we may not see the effects of these until somewhere much further down the line.

Another organisation we spoke to was facing issues with securing the necessary PPE for their staff. We have all heard plenty of news about the shortages faced across the country, but what is less understood is the frustrating and inefficient solutions and workarounds that organisations are having to find. For one organisation this meant last minute phone calls to make sure all their staff were delivered PPE for their shifts that day.

We have men in vans taking PPE around the country to where it needs to be and generous volunteers doing end distribution, [going out to] meet their patients. Because the supply is so limited, we are looking on a daily basis at like ‘do we have enough gloves in Liverpool, can we deliver gloves to this nurse before her shift.’

Finally, for some charities, their efforts to secure financial support have been frustrated by simply not quite meeting the criteria for any one support scheme. For example, an organisation told us they are too big to apply for National Lottery support and that they do not fit neatly within the remit of any one government department. What’s more, they are unable to furlough any staff because they are all delivering essential services. These charities feel as if they are falling through the bureaucratic cracks, and with depleting reserves, they are left to look to riskier options like large commercial loans.

There are three places we can technically go for support … but government interventions have delivered zero at the moment, and our cash reserves have been depleting at a rate of knots.

More to come

This crisis is being experienced in a range of different ways—for several charities it is worrying about how you will protect your staff from the virus this afternoon, whilst for others it is the small print on a grant application which classifies your organisation as ineligible for any support. For many, who have so far carried on admirably, their experience is marked by a lethal combination of depleting funds, the oncoming economic crash, and subsequent rising need. For these organisations, the worst of the crisis is yet to hit, and we hope that our research will mean that they are able to do more than just ring alarm bells when it does.

At NPC, we have produced a range of resources to help the sector combat this crisis and to build resilience in the sector as we all move forward, but we want to do more. Please get in touch if you would like to discuss what we can do to support you during this time.