Many UK charities have had to curtail or temporarily cease their charitable and fundraising activities as a result of the restrictions put in place to slow the spread of Coronavirus (COVID-19). Just as many business owners across the country are having to review their options and make difficult decisions, so too are charity trustees in order to mitigate the impact on their stakeholders including employees, volunteers and beneficiaries.
Some key points for charities to consider include:
1. Although the latest announcement from the Prime Minster will likely mean many trustees will not be able to physically meet as a board of trustees for at least three weeks, it is important to continue to show good governance. Where possible use technology such as FaceTime, Skype, Zoom etc. to hold virtual meetings and to keep all trustees updated. Once the board has made any decision, ensure it is documented correctly and in detail – continue to produce minutes including an explanation as to why the board could not physically meet and how they achieve their virtual meeting. Where AGMs cannot be held or other statutory compliance obligations cannot be fulfilled, the government have stated that their “approach to regulation during this uncertain period will be as flexible and pragmatic as possible in the public interest”.
2. Many charities or their trading subsidiaries will be employers. The charity will have to decide whether any or all of their staff are able to continue to work. The government has confirmed that charities are included in the organisations eligible for Coronavirus Job Retention Scheme, which will provide a grant to reimburse 80% of the cost of any furloughed workers, up to £2,500 per worker per month for up to three months. Employers will need to notify employees of this change in employment status to furloughed and changing the status remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
3. Other grants and loans may be available to charities, depending upon their size and operations. The government is announcing details on a daily basis, so it is important to keep up to date with information as it is released.
4. Review your reserves and designated funds (which are earmarked as the discretion of the trustees). Charities will have a reserves policy and will hopefully have put some money aside to be used in extraordinary circumstances such as these.
5. Restricted funds (which must be used for a specific purpose imposed by the donor or through the terms of an appeal) must not be spent on anything beyond the restricted purpose originally intended. In limited circumstances, it may be possible for the restriction to be lifted by the donor or the Charity Commission. However please seek professional advice before acting.
6. In order to maintain cashflow so that essential operations can continue, it may be necessary to put some projects and other planned expenditure on hold.
7. You may be in a position to approach funders who have supported the charity in the past for further grants or donations. A number of charitable foundations and grant providers are currently working to put support packages in place.
Further government guidance for trustees can be found here.
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