Income at Help for Heroes rose by 20 per cent last year, its latest accounts show, although the charity still recorded a £5.1m deficit.
The accounts of the veterans charity for the year to 30 September 2019 show that it had an income of £26.9m, up from £22.5m in the previous 12 months.
But Help for Heroes spent £32.5m in 2019, meaning there was an overall deficit of £5.1m once gains on investments were factored in.
The charity closed the gap between income and expenditure, which stood at £14.3m in 2018.
The charity’s 2019 accounts show that legacy income rose to £9m, an increase of £1.9m on the year before.
Grant income also rose by £3.1m to £3.5m overall, according to the accounts, but there was a £400,000 fall in donations to £5.8m overall.
The charity has free reserves of £12.1m and further restricted funds to help it through difficult times.
Mel Waters, chief executive of Help for Heroes, said in a statement: “Ninety-seven per cent of Help for Heroes’ income comes from the public, but the fundraising climate last year was tough, so we made a conscious decision to dip into our reserves to ensure we could meet the increasing demand for our support.
“This decision was part of a long-term business plan to focus on secured and repeatable income, while providing robust and effective services.”
Help for Heroes will furlough 40 per cent of its staff in response to the coronavirus pandemic, Third Sector understands.
The charity employed 356 people according to its 2019 accounts, which means that about 140 staff are expected to be affected.
The charity has seen its income hit by the cancellation or postponement of fundraising events and activities because of the lockdown across the UK to prevent the spread of the virus.
Third Sector understands that the charity believes it holds sufficient reserves to keep vital services open for veterans, but the furlough scheme would give Help for Heroes the opportunity to protect its reserves during the uncertainty caused by the Covid-19 pandemic.
The charity is also promoting initiatives such as Hero Up, which allows supporters to fundraise for Help for Heroes while gaming, as well as virtual events in which participants can take part at home.
Waters said in a statement that the charity was facing a “serious, unprecedented threat” to its income as a result of the coronavirus pandemic.
“We have adapted our services to provide vital support during this global crisis and have seen an increase in the number of calls to our psychological wellbeing team,” Waters said.
“We will be doing everything we can to ensure we can keep our promise to our wounded and their families.”