Paul Streets: We must prepare for the difficult and costly challenge of recovery and renewal

We know charities will prepare to spring back into recovery, but whether that leads to new beginnings or descends into disintegration is all in our hands

Paul Streets
Paul Streets

We have heard remarkable stories of charities repositioning what they do to respond to Covid-19, from the Red Cross and St John Ambulance to the Royal Voluntary Service and the hospice movement. But although some large charities, with higher operating costs and more dependency on public fundraising and equity-based reserves, have faced significant and rapid cash-flow challenges, many smaller charities have appeared to be more resilient.

Most of those we fund will have cash reserves for between three and six months. But although many have had little choice but to furlough staff, we have been surprised at how few have sought urgent funding or asked to draw long-term grants forward in response to the flexibility offered by most funders, taking the lead set by London Funders.

In the meantime, demand has spiked. Those on the margins or the highly vulnerable have been driven right to the edge. Most visible in the media are those facing domestic abuse, mental health issues and homelessness. But there is an as yet largely unseen story of the impact on refugees and asylum seekers, people with dependencies, those who are trafficked and sex workers.

We have been heartened, but not surprised, to see small charities responding creatively. Local domestic abuse charities have moved to online services, which might be easier to access for women and men forced into 24/7 proximity with their abusers. Mental health charities such as Chilli Studios have moved to online support and delivered wellbeing packs to service users who would normally have visited their centres.

Refugee charities such as Carriers of Hope have shifted to provide new basic furniture – as second-hand donations have dried up – and moved centre-based activities to home delivery of essentials.

To meet these different demands we have repositioned our own support to grantees, providing practical things such as laptops to support remote working, hosting webinars and virtual peer-to-peer support groups, and commissioning resilience coaching to staff who are juggling demanding work with family pressures or social isolation.

But challenging as the present is for us all, it feels like we are in the lull before the economic storm Covid-19 will leave in its wake. Charity reserves will start to run dry as we run into the summer. With no means to recoup lost income, charities that have been a lifeline during the immediate crisis will have to retrench just when they should be moving out of furlough and into “post-crisis” support mode, when they will be needed more than ever as demand for their services spikes. Charities will be faced by service users who are struggling to adapt to life after lockdown, their ranks swollen by collateral victims of the forthcoming economic damage. People and places with the least will face the worst.

We should welcome the outpouring of support for emergency, whether from the Chancellor, Rishi Sunak, from the public or from corporate donations, but we must also prepare ourselves for the far more difficult, and much more costly, challenge that awaits us post-emergency: “recovery” and “renewal”.

We’ve seen enough to know that charities will prepare themselves positively to spring back into recovery, but whether that leads to renewal or descends into disintegration is all in our hands. With our reach, experience and relationships with the sector, foundations have a key role to play in shaping its response.

Like all crises, Covid-19 has brought new thinking and opportunity. Under the auspices of the Association of Charitable Foundations, funders are initiating new approaches to collaborative working with the sector that would never have been considered before.

But we cannot do it alone. Sunak will have to show he means he will do “whatever it takes” if we are to renew the social infrastructure the UK needed prior to Covid-19. That will be needed a whole lot more post-Covid, when Boris Johnson’s levelling up will look a whole lot harder, but even more important.

Paul Streets is chief executive of the Lloyds Bank Foundation

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