Has the government ‘bailed out’ the charity sector?

After the clamour from the sector for support in the early days of the Covid-19 crisis, on 8 April the Chancellor, Rishi Sunak, announced a £750m package to ‘ensure [charities] can continue their vital work during the coronavirus outbreak.’

We have released a report breaking down how this money is being distributed. Throughout this research we’ve been asking ourselves why the money is being distributed in this way, and how it has helped charities? Drawing on our recent submission to the Department for Digital, Culture, Media and Sport (DCMS) Select Committee’s inquiry into Covid-19’s impact on the sector, here are our initial thoughts. However, in truth, there are a lot of questions that we still need answers to.

Unclear goals

The government’s Covid-19 funding for charities is divided into a large number of different pots and between many different causes. Some of the funding is organised by the cause a charity serves (e.g. £30m for domestic abuse survivors and survivors of sexual violence), some of it by the size of the charity (e.g. £200m for smaller charities in England) and some of it is directed to specific charities (e.g. £15m for the Citizens Advice Bureau).

Of course, all of these different types of funding are welcome, but with the funding being broken into so many different sub-funds (we think there are around 17 main sub-funds, ranging from £6m-£200m, often with many even smaller funds beneath them) it is hard to reverse engineer an understanding of what the government is hoping to do for the sector.

One possible interpretation is that the government is not especially interested in supporting the sector as a whole but is instead interested in helping it fight Covid-19 and the social issues caused by the pandemic. Evidence for this view comes from the allocation of £200m direct to hospices for example. This raises questions about how these causes were selected and whether the funding was designed in such a way as to tackle the issues caused by Covid-19 in particular charitable areas, rather than to support the organisations that work in these areas.

In some areas, such as £14m given to the Department for Environment, Food and Rural Affairs (DEFRA) for zoos and aquariums, it is hard to see how the funding supports charities to tackle the virus. In others, such as £22m allocated by various departments to ‘health’ charities, the connection is of course much clearer. But we do note that £22m is significantly less than what was allocated to other causes, such as domestic abuse, but more than what was allocated to homelessness. There is nothing inherently wrong with this, but it is hard for the sector to understand the thinking behind these levels of funding without an explanation of the government’s broader approach.

Working with charities

While the government has obvious reasons for wanting to be seen to be giving funding to charities, a more accurate description of the £750m is that the government gave money to other organisations, to then give to charities. Often these were charities themselves, and broadly this is a good thing.

It is encouraging to see that charities in specialist areas, such as Homeless Link, have been used to distribute funds to other charities working on that cause. The National Lottery Community Fund has been used to distribute the largest single pot of funding and will no doubt use its experience as a major funder to its advantage. Using these specialist and experienced organisations will likely improve the impact of the funding on the sector.

That said, there are two areas where further information is needed to understand the impact of this support package. We need clarity on how the organisations were selected and why it was decided some departments could or should run funds themselves rather than seeking a sector partner.

We also need details of the accountability mechanisms that the government has put in place to ensure that the funds set up by partners have the desired impact. For example, it is important to understand what requirements were placed on partners to allocate funding to the areas of highest need, how distribution was balanced between regions, and any attempts to ensure the funding reached specific communities such as the elderly or BAME communities.

Speed

The message from many organisations in the sector has been clear: they need urgent support to keep delivering services because their incomes have dried up. The £750m package was announced by Rishi Sunak only 17 days after the UK lockdown was announced on 8 April.

But it then took some time for many of the funds to actually open, and we do not yet have a clear picture of how much money has actually reached frontline charities. For example, the main fund for ‘smaller charities’, administrated by The National Lottery Community Fund, did not open until the 22 May, 43 days later. We also do not know yet how much of the £200m allocated for hospices has reached them, or even who is allocating it.

Before we published our report, we were aware that many charities wanted to know how they could access some of the government’s support package. We also knew that there was confusion about how much of it has been allocated. Whilst we have been able to shed some light on the basic allocation of the £750m and which sub-funds are still open to applications, many questions still need answering. The government’s funding has addressed some of the sector’s initial needs. But charities need quicker support and they need to know what the wider objectives of the government’s package are and what is expected of those who have been given funds to distribute.

For more, read the full report Where is the government’s £750m package for charities being spent? We set out the three main pots of funding, info on all the sub-funds, and why we believe the government’s total funding package for charities now stands at £770.35m.