Voluntary sector faces 'imminent collapse' without urgent funding, government warned

Charities cannot do what they do best if they have gone bust, leaders warn

Charity sector leaders have warned the government that the sector faces "imminent collapse" if funding is not immediately made available to help during the coronavirus pandemic.

The National Council for Voluntary Organisations, the Charity Finance Group, Acevo and the Institute of Fundraising have joined forces to ask the government to provide guarantees similar to those offered to the business sector as the economic damage of quarantine measures becomes apparent. 

Third Sector is also backing the campaign, which is using the name #EveryDayCounts.

The onset of Covid-19 has seen charity shops closed and fundraising events and activity cancelled, reserves depleted and demand for services increasing, all of which is hitting charities' financial viability. 

A £330bn rescue package for business was proposed by the Chancellor earlier this week, but the Treasury has been slow to confirm what money would be available to help charities during the crisis.

The charity sector bodies said the sector would miss out on a minimum of £4.3bn of income over the coming 12 weeks, with many also facing increased costs through having to tackle the outbreak.

This could mean charities of all sizes closing from next week, the four organisations warned.

The umbrella bodies have asked the government to provide emergency funding for front-line charities and volunteers that are supporting the response to the coronavirus crisis, especially where they are alleviating pressure on the health service or providing support to people suffering from the economic and social impacts of coronavirus. 

They have also asked the government to set up a "stabilisation fund" for all charities to help them stay afloat, pay staff and continue operating during the course of the pandemic, and to confirm that charities would be eligible for similar business interruption measures announced by the Chancellor in the past fortnight.

Karl Wilding, chief executive of the NCVO, said: “Every day counts here. I’m hearing from charities whose income has disappeared overnight but still have to run services for their communities. Many of them have very little emergency cash to tide them over, and even those that do will run out in a matter of weeks.

“Many charities are helping in the current crisis to alleviate pressure on the health service or providing support to people suffering from the economic and social impacts of coronavirus. Supporting the national response and helping vulnerable people to cope is our first priority at the moment, but we cannot do that if we are on the brink of financial collapse.

“I know the government is working on this, but for many charities around the country there is very little time to spare.”

Vicky Browning, chief executive of Acevo, said: “Charities of all sizes – from local community groups to our well-known national organisations – are a vital part of our country’s response to this crisis.

"But the voluntary sector cannot do what it does best if it has gone bust. Charities need swift, simple and substantial funding now. The government’s promise to do ‘whatever it takes’ must include charities.” 

Peter Lewis, chief executive of the Institute of Fundraising, said: “Charities will have planned on raising millions of pounds, which is going to be irrevocably lost because of the impact of coronavirus. 

“The cancellation of high-profile events such as the London Marathon, as well as thousands of smaller events run by local charities across the country, closure of shops and a halt on public fundraising activity have already caused huge problems for charities, which quite simply can't plug the gap in such a short time.”

He added that spring and summer were important times for fundraising, and support from the government was needed immediately to mitigate the loss of millions of pounds in income.

Caron Bradshaw, chief executive of the Charity Finance Group, said: “We have encouraged charities to diversify their funding models over the years and retain reserves on a risk basis. But this situation is unprecedented in attacking every area of charity income, while increasing demand and costs, and is rapidly burning through reserves. 

“If the government doesn't act now then the longer-term impact on the economy, society and social wellbeing will be devastating and almost impossible to recover from.” 

Emily Burt, editor of Third Sector, said: "Third Sector is proud to throw its weight behind the #EveryDayCounts campaign.

"All week we have heard from charities that are balancing delivery of services with their own struggles for survival.

"Describing third-sector organisations as 'key workers' or announcing that you are 'coordinating a major volunteering push' are meaningless if the government is not prepared to also provide urgent financial support.

"The Chancellor needs to outline measures of financial support for the voluntary and not-for-profit sector as an absolute priority. Failing to do so will have catastrophic implications for charities." 

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