Written evidence from ACEVO, the Association of Chief Executives of Voluntary Organisations

DCMS Select Committee

Impact of Covid-19 on the charity sector

30 March 2020

1.      Introduction

1.1              ACEVO is the Association of Chief Executives of Voluntary Organisations. It is a membership body of over 1,400 CEOs and senior leaders of civil society organisations working in England and Wales. Through its network ACEVO inspires and supports civil society leaders by providing connections, advocacy and skills.

1.2              This submission of evidence comprises of 24 case studies of charities struggling with the impact of COVID-19. The majority of the case studies are ACEVO members.

1.3              The examples in this document demonstrate the scale and severity of the problem, and the charities range from household names to local community groups.

1.4              Charities are facing massive drops in income, but cannot close their doors and furlough staff as demand for their services continues, or in some cases has increased. The submissions also demonstrate that many charities are ineligible for the support already offered to businesses.

2.      Action for ME

2.1              This £1.1m Bristol-based national charity supports people with ME, including disabled children and adults. During this crisis, the organisation has had to stop all non-essential and non-crisis support work, meaning GP education, policy and influencing work and advocacy has been halted. This is significant: people with ME are six times more likely to commit suicide and have a lower quality of life alongside fewer opportunities. After SARS, there was a rise in cases of ME as the condition is post-viral for many patients. The organisation expects this to occur again.

2.2              The charity has re-forecasted its budget, identifying a 50% fall in income. This has already begun to be realised. It plans to furlough 6-8 staff next week, causing financial pressure for those staff who are already on comparatively low salaries compared to other sectors. The CEO is taking a salary cut and many other staff are cutting hours, significantly reducing the number of people they can work with as demand for services continues to increase.

3.      Age UK Bexley

3.1              Federated local branch of Age UK. Provides a range of support to elderly people in the area, including befriending services, home support, hospital discharge and domiciliary care. There is a clear growing need for these services at the present time.

3.2              Approximately 45% of the organisation’s £650k income is derived from charged-for services and spot-purchased contracts. All these services have been suspended, seriously threatening the organisation’s sustainability. To protect staff, the charity has been liaising with the local authority to redeploy and replace lost social care staff. While it could furlough staff, this takes a valuable resource out of the support equation in the crisis if it does so, as the borough and NHS commissioners are increasingly stretched. A sustainable plan to respond to growing need is becoming more and more challenging, especially with PPE in short supply (only paper masks have been delivered) and the potential associated risks for staff. With £100k of available cash and monthly operating costs of £45k, cash flow will become a problem for this organisation sooner rather than later.

4.      Age UK Medway

4.1              Local federation of national charity Age UK, supporting approximately 3,000 older people per month through day centres and a variety of activities. On the 23 March at 4pm all of these services closed. The organisation is funded wholly by service charges levied to beneficiaries, and spot-purchased contracts carried out for the local authority. The closure of services and a very successful charity shop resulted in an income drop between 70-80%.

4.2              The £2.4m Kent-based charity continues to deliver domiciliary care, delivering meals and making befriending calls via volunteers, but clearly cannot operate on 20% of its planned income. The organisation planned to request a loan of £1m from the Coronavirus Business Interruption Loan Scheme (CBILS). The charity was informed that it could only apply for £484k (20% of previous year’s income). However, in order to apply for this loan the organisation needed to prove a lack of security. Because the charity owns two properties from which it operates day care services, it is ineligible for CBILS and encouraged to use normal mortgages or a loan against assets, without a 12-month free period or waiving of fees.

4.3              Other options are also not appropriate. The smaller grant for businesses with under 250 staff is based on the rateable value of the business: as a charity, it has no rateable value so is ineligible. The government’s job protection scheme needs to override employment legislation to get past the requirement for staff consultation. Placing 120 staff (or a large proportion of them) into furlough removes 120 keyworkers from the frontline during a national crisis, and requires the charity to pay them 80% salary from reserves, waiting to claim this back into the charity from future income when services reopen.

4.4              The charity could potentially secure functioning for 4-6 months, but only if the bank can be persuaded to release bonded interest paying sums where some reserves are placed; a mortgage can be secured on one of the properties; and the potential of a £250k loan from government can be secured. The charity is desperate to remain open and ready to provide services to its beneficiaries, who needed them before the crisis and will need them afterwards. Without a package of financial support, the charity will cease to operate and all of these elderly people in the local area risk being forgotten.

5.      Architectural Heritage Fund

5.1              This funder supports communities to create new futures for old buildings. The funder estimates that approximately 40% of its social investment clients will go bust without support over the next few months. The support from the NLHF (National Lottery Heritage Fund) is unlikely to be enough to support everyone.

6.      Beacon Counselling

6.1              Beacon Counselling is a £500k-income Stockport-based charity which builds resilience in communities by supporting adults, young people and children experiencing mental and emotional distress.

6.2              In line with best practice it has spent years diversifying its income streams through trading and similar whilst growing and increasing its impact. This means it is now facing a potential drop in income of 45 – 60% in the space of three weeks.

6.3              The charity delivers mental health support to all ages, including some of the most vulnerable in society, supporting around 2,200 people each year. It intended to increase its impact during coronavirus as poor mental health is likely to increase through isolation, greater stress, and high levels of uncertainty, so the charity has moved all its services from on-site to remote, including a mix of employees, contractors, and volunteers.

6.4              The only income it can rely on is from two public sector contracts, one of which is with the NHS to deliver an IAPT service (Improving Access to Psychological Therapies - a flagship of the NHS’s mental health provision).

6.5              The charity will be taking up the furlough scheme, but this does not address the shortfall in income required for premises costs and unless some form of emergency funding is accessed it is likely to reduce services to a fraction of its current work.  Even then it may still not be enough, and an award-winning provider of mental health services will close.

7.      Bowel Cancer UK

7.1              Bowel cancer patients and the NHS need our vital services now more than ever, and yet, the only relief that Government has extended to us currently is a furlough scheme which removes staff from our charity at a time when demand for our advice and support is at its highest. We are responding at pace to the impact of COVID-19 and have cancelled all face-to-face services and fundraising events, and we’re accelerating online initiatives to get vital support and information to frightened and lonely bowel cancer patients.  

7.2              We estimate the impact on our income to be severe – up to 30% of our annual total. Like others, we may soon be forced to make irreversible decisions that will decimate our ability to help some of the most vulnerable in our society. 

8.      Brainwave

8.1              A charity that helps children with disabilities to achieve greater independence by aiming to improve mobility, communication skills and learning potential through a range of educational and physical therapies. Working with have a range of conditions including, autism, cerebral palsy and genetic disorders such as Down’s Syndrome, and providing life-changing support for 38 years. Income of £2.9m.

8.2              The organisation receives no statutory funding from national or local government, and had to take the decision on 23 March to close all charity shops and three Brainwave centres, suspending all service provision. Fundraising events have also been cancelled or postponed. The charity estimates an income loss of approximately £500k.

8.3              Many of the charity’s beneficiaries are vulnerable and have been in self-isolation with their families. Having to cancel therapy appointments compounds the psychological and physical isolation they are experiencing as a result of their condition and the Covid-19 crisis. The charity has serious concerns it will not be around to support these people when the crisis ends.

9.      BRACE

9.1              BRACE is a medical research charity with income typically of £800-900k per annum. It funds dementia research and is a member of AMRC. Although the organisation does not support NHS front line services, it helps indirectly by funding clinical research on an NHS hospital site. The organisation also supports research projects at several universities and funds the SW Dementia Brain Bank, having done so for over 30 years.

9.2              The organisation is faced with a crisis due to coronavirus, after a year in which anxiety about the future of the country hit charitable giving. BRACE had just started a promising programme of community fundraising when the pandemic hit, wiping out a series of fundraising events and public meetings from 21 March to the end of June. The charity has furloughed some staff under the government scheme to help manage cashflow, but fundraising at any significant level cannot be restored until some form of normality returns.

9.3              If BRACE were to disappear this would have a significant impact on dementia research. The SW Dementia Brain Bank’s future would be jeopardised, alongside a dementia research nurse post and specific research projects in universities which might not be funded by other streams, however vital the work. Seven universities would be impacted by BRACE ceasing to exist, and research is already being impacted, with several labs closed. If regular funder charities collapse, the medical research of the future is under serious threat, and future medical crises will be even harder to cope with.

10.  Community Transport

10.1          Community Transport operates accessible passenger services for those with mobility issues, underpinned and subsidised through the sale of pre-loved furniture items from a number of stores in the northeast and West Midlands regions.

10.2          As CT is no longer able to sell furniture, income (£3m in 2018-19) has dropped significantly, despite trying to retain online sales and offering delayed delivery.

10.3          The bus services are operated using accessible minibuses, adapted to support those with poor mobility or who may be wheelchair users. The nature of UK driver licensing legislation means that most drivers are closer to the end of their working life than the beginning, and so are more likely to experience underlying health conditions themselves, which increase the risk to their health of continuing to deliver services at present. Two thirds of CT’s driving colleagues experience a health condition which places them in the “increased risk” category. Those deemed to be at significant risk have been instructed not to attend work during the current health crisis.

10.4          Passengers services include: rural connection services that allow older residents to access the post office, shopping facilities and health appointments, residents groups to leave home and socialise, support to children who experience disability or who attend specialist education provision, and most significantly at the moment, transportation of 90 people, every day, to renal dialysis clinics across the West Midlands. CT is working with the West Midlands Ambulance Service to find ways of providing this essential transport to clinic, whilst reducing risk to those patients as far as possible. This is a service for which it is paid, but wider services which support the depots from which the services operate, the supervisors that plan routes, risk assess journeys, ensure that the vehicles are checked and tested to a stringent level, the people who wash and sanitize the vehicles, the insurance, rent etc are not wholly covered by this income and rely on income earned in other ways.

10.5          Where some contracts have ended, commissioners have said that they will pay a reduced fee in order that we can be up and running when we are needed again, but this does not cover the fixed costs in most cases. We have offered use of our vans with or without a driver to assist in delivering food to vulnerable residents and hope to be able to provide more support in these difficult times, but our main source of income has been reduced by almost 50%, and is only at this level as we are still providing services which support the NHS.

11.  Croydon BME Forum

11.1          This organisation (income £300k) provides infrastructure support to over 50 local groups as well as delivering specific projects. It has a main office suite and opened a new ‘Wellness Centre’ on 20th February to support the mental health and well-being of local people from BAME communities. More than 300 people have used the centre since last month.

11.2          Coronavirus has had a significant impact on several of the Forum’s income streams. The Wellness Centre has had to close, meaning the organisation has lost over £5k in room bookings and rent. The organisation has been unable to renew the contract of the Wellness Centre Project Worker. Additionally, a new contract due to start with the local CCG is now uncertain, as it aimed to target BAME adults with diabetes who will now need to self-isolate for up to 12 weeks. Weekly shopping services for older people have also had to stop, at a time when demand from these elderly BAME individuals is increasing and alternative services are desperately needed.

12.  Florence Nightingale Foundation

12.1          This £1.4m London-based charity provides leadership development to nurses and midwives through commissioned programmes and scholarships. Its core business is focused on fuelling the potential of nurses and midwives to continuously improve the quality of patient care. Covid-19 has meant all 2020 planned activity has been postponed indefinitely, meaning the charity has incurred significant cancellation fees and development opportunities cannot be offered. This clearly impacts the commitment of these nurses to provide high quality care to the public. In addition, without a clear indication of when services could resume, staff who support the organisation are at risk of job loss.

12.2          In order to mitigate this risk to the charity, the team has been seeking alternative funding through established sponsors and specific funds that have been made available to support small charities. It has also attempted to rapidly diversify its offering and consider virtual methods of delivery. This has resulted in extremely high stress and long working hours enacted in environment of uncertainty and instability.

13.  House of St Barnabas

13.1          Our mission is to break the cycle of homelessness. We work with those who have experienced homelessness to support them into employment for the long term. We are a viable social enterprise who generates over 50% of our income from trading and have a thriving strategy and business under normal circumstances. Our best estimates at the moment are that we will be running a deficit of between £750k to £1m in 20-21 due to the impact of Coronavirus, depending on when we are able to reopen. We have cash reserves of £500k. Under usual circumstance we were budgeting to breakeven and that was based on conservative income projections. If we close this will have a huge impact on our vulnerable beneficiaries as well as mean all jobs are redundant, including those employed by our employer partner. Our Trustees are exploring all options including access to the Business Interruption Scheme and furloughing 50% of our staff, but neither of these will fill the deficit for us in its entirety. An injection of grant funding is critical if we are to continue to supporting our vulnerable beneficiaries to avoid becoming or staying homeless.

14.  Khulisa

14.1          Khulisa has been supporting children and young people who have experienced trauma, abuse and neglect for over 10 years. With an annual income of £700k, its team of 12 people have provided therapy and mentoring support to thousands of the UK's most vulnerable young people in our society, preventing the escalation of mental health issues and enabling young people to live healthy, fulfilling lives. Without support from the government, Khulisa will be forced to close its doors forever in four months' time.  This will remove a crucial safety net for hundreds of vulnerable young people who need its support now, more than ever.

15. Minstead Trust

15.1          New Forest based charity providing support and care to people with learning disabilities, including residential care, supported living and day centre opportunities. Its £3.3m income is subsidised by various social enterprises, including a 13 acre garden, tea rooms, a theatre and arts centre and a conference centre, all of which provide job opportunities for people with learning disabilities. All of these are now closed. Fundraising events expected to raise over £10k have been cancelled; corporate partners bringing in about £5k per year have withdrawn; community groups bringing in vital regular amounts are not meeting.

15.2          The local authority funds two day centres, which it has asked to close. However the LA has not confirmed whether the funding for these services remains in place. Furloughing staff is not feasible, as some care services are still open so these staff may be needed to backfill other positions if staff are off sick. The charity’s reserves would ordinarily last six months: due to investment funds depleting this is now down to four or five months, as every stream of income has stopped overnight. The organisation urgently needs confirmation of continued local authority funding, with money that was always intended to be spent.

16.  National Migraine Centre

16.1          Organisation supporting people with headaches. Its largest patient group is NHS workers, including surgeons, neurologists, junior doctors of varying types, GPs, nurses of various types, physios, and a raft of administrative and management people up to trust board level. The charity also supports any number of the above professionals who have been forced to retire and or reduce their work load because of migraine. Migraines cost the UK economy c. £10bn every year (Work Foundation).

16.2          The NMC is located in the coronavirus hotspot in London and is experiencing high calls from people in pain and distress as NHS provision of headache clinics for these conditions decreases. The organisation (£380k income) relies on seeing patients and donations from patients. Without them the entire business model falls down, which is beginning to occur. The model is comparable to the hospitality sector, except that customers are called patients. Without support, the charity will cease to exist in eight weeks.

16.3          Once the crisis lessens, the NHS will simply be unable to cope with the huge backlog of headache work. The organisation is well-placed to support NHS staff in this crisis period and during the recovery phase to prevent burnout and support those struggling to obtain NHS support as the service recovers, but cannot do so without financial help.

17.  RFU Injured Players Foundation

17.1          This is a £1.8m charity working with individuals who have sustained a functional disability through injury. It usually meets the NHS shortfalls by providing access to specialist physiotherapy. These providers are now not able to provide these services for approximately the next six months as they have been drafted by the NHS.

17.2          This will hamper individual’s recovery from injury, leading them to need greater support from the state for the rest of their lives and have a reduced quality of life.

17.3          For individuals some years post-injury, this lack of specialist input may put them at greater risk of developing serious problems in the coming months (falls in the home, reduced mobility)

17.4          The charity is likely to see an increase in funding requests for carers as they may fall ill.

17.5          The mental health impacts of prolonged isolation (on top of all the other issues disabled people are faced with) is going to be significant. Will services be stepped up to pick up this bombshell once the virus is under control?

17.6          All of this is happening at a time when investments have lost significant value and fundraising events can’t proceed. This charity is lucky to be reasonably well-protected in the short term to be able to continue to provide support, but is very worried for the future.

18.  Royal Life Saving Society

18.1          The UK’s leading provider of lifeguard training and drowning prevention training. Nearly 600 people drown each year. Last year the organisation delivered Water Safety Education to 60,000 children and trained 65,000 more children in lifesaving and lifeguarding. Nearly 250 people took their own lives last year through drowning, an 11% rise on the year before, demonstrating the essential nature of these services.

18.2          Due to the lockdown, pools and beaches have been closed. 85% of the charity’s activity is funded by training lifeguards in these spaces, so this income has all been lost. Trading has reduced from £15k per day to less than £1k per day in the last week. The organisation is currently relying on three months’ reserves. It has cut costs, delayed payments, deferred rent and furloughed 80% of staff, while remaining staff take a 20% pay cut.

18.3          The organisation is deeply concerned about warmer weather and people being more and more desperate to be outside, creating a spike in drowning. The mental health of lifeguards whose work has vanished is also a serious concern. After concerns from Trustees about having too much in reserves, these have been spent down to within 3-6 months, but the organisation has few assets and trustees cannot offer personal guarantees. Without support from the government the charity will become insolvent.

19.  RoSPA (Royal Society for the Prevention of Accidents)

19.1          This 103 year old charity works to prevent accidents on roads, workplaces, leisure, education and the home through the three Es: Education, Enforcement and Engineering.  It carries out research and delivers awareness-raising programmes in campaigns, such as securing seatbelt legislation in 1983. Improvements in the safety of the UK’s workplaces and roads alone have saved 125,000 lives since 1960, containing accident rates and in turn, demand for NHS resources. Despite this, 2018 saw 5,719 deaths and over 480k hospital admissions for falls. The Covid-19 crisis makes preventative work more urgent than ever before to to prevent further strain on the NHS.

19.2          The Covid-19 lockdown means that RoSPA’s classroom training, in-vehicle training, conferences and awards celebrations cannot take place. These have accounted for approximately half of RoSPA’s £9m annual income. Although demand for RoSPA’s expanding suite of online services is growing, there is no guarantee that this will be enough to plug the income shortfall. What is more, it has yet to hear from various government departments about the funding for its new and ongoing safety programmes.

19.3          Although the charity welcomes the Chancellor’s proposals regarding furloughed employees, the real challenge is replacing financial contributions generated by trading activities. The charity cannot afford to get into debt, and urgently needs confirmation from government of the programmes it funds, and a one-off grant to cover the shortfalls caused by the Covid-19 lockdown.

20.  Sarcoma UK

20.1          £1.9m charity providing support and information for all types of sarcoma cancer. The organisation has seen a four-fold increase to its support line, and patients are incredibly anxious due to heightened risk, cancelled surgery, and mixed messages. Staff on the support line have been doubled, but the charity relies heavily on events and community fundraising and is budgeting for a 30% drop in income – which is probably an optimistic estimate. Expenditure lines are being cut and services are likely to be seriously impacted without a package of support.

21.  Tiny Tickers

21.1          A small (£200k) national charity supporting babies with congenital heart disease (CHD) across the UK. Trains NHS sonographers to spot the signs of CHD in pregnancy screening; funds equipment for NHS maternity units; awareness-raising work with medical professionals as well as pregnant women and new parents; supports parents dealing with a diagnosis. Annual income of £212k.

21.2          The charity has had to suspend its core activity: face-to-face sonographer training not provided by the NHS and often funded by individual hospitals. It has also had to suspend supplying machines and equipment which detect potentially life-threatening disease in newborns. A baby is born every two hours with CHD: this will continue during the Covid-19 crisis.

21.3          All income streams are under threat. A long-term corporate supporter has withdrawn; individual givers are starting to leave; trusts and foundations are delaying decisions on grant applications; and events and community fundraising has fallen off a cliff. The reserves the charity has built up were intended to fund a wide range of new work, but they will only last so long – weeks and months.

21.4          Nonetheless the team are extremely busy, inundated with requests from concerned parents for guidance. Staff members need to reduce working hours to provide childcare. The overall impact of the crisis is potentially devastating for babies with CHD, and many lives are at risk due to a lack of critical cardiac equipment and support. The organisation desperately needs a positive intervention from the Chancellor in order to keep delivering vital services and provide support wherever they can – rather than battling to keep their head above water.

22.  Together Co

22.1          This £700k homelessness charity based in Brighton provides befriending support, with around 400 volunteers normally providing 16,000 hours of friendship and support a year to 400+ people. The organisation is highly networked in the city, co-ordinating the social prescribing network in Brighton and providing vital services in primary care and adult social care. A failure of the organisation would have a huge impact on these services.

22.2          Unsurprisingly there has been a huge rise in client need. The charity is planning for a 50% increase in befriending services, and also plans to redeploy its 10 social prescribing link workers to help GPs supporting shielding patients who have been advised not to leave their homes for 12 weeks. All current volunteers have been mobilised to increase support and huge numbers of new volunteers are being onboarded. The charity is a key player in the city-wide coordinated response to Covid-19.

22.3          The organisation has two months’ reserves, having recently rebranded, moved office and invested heavily in restructuring work to be more sustainable for the future. It had planned to rebuild its reserves through diverse fundraising, including corporate donations, grants and commissions. Debtors from 2019-20 amount to £42.5k who may or may not be able to pay at this time. The organisation does not expect to hit budget of £55k corporate support, or £40k from trusts and foundations. The organisation therefore expects to lose up to £137k of income next year, approximately 18% of turnover, and more than its current reserves. The charity expects to lose £34.5k of this by June, meaning staff would need to be made redundant, including both support staff and social prescribing staff who are clearly vital in the current climate.

23.  The Ubele Initiative

23.1          The Ubele Initiative was established in 2014, using a bottom up community engagement approach. Over the past 6 years it has supported community wealth building through next generation leadership, community enterprise and creating more sustainable spaces. It is now an infrastructure organisation working with Power to Change and Locality to develop new community-based initiatives.

23.2          Ubele has secured most of its income through European programmes, consultancy contracts and management fees from incubating innovative BAME led projects. However, it has never secured core funding and due to the nature of project based work has reserves of less than 3 months. Ubele was recently appointed as the BAME infrastructure group for London (with a focus on community assets). This new role is funded through the GLA and City Bridge Trust. As a result of the coronavirus, the European projects have been put on hold and the consultancy projects have slowed down. Ubele has now furloughed 3 of its 4 FTE staff. Without urgent financial support, a vital infrastructure body for BAME organisations will be lost.

24.  Wildlife and Countryside Link

24.1          Between 20 and 24 March 2020, Wildlife and Countryside Link worked with NI Environment Link, Scot Link and Wales Environment Link and its members to conduct a survey of the impact of the coronavirus on the environment sector across the UK.

24.2          The aim of the survey was to help DEFRA, the statutory agencies, devolved administrations, and grant funders, including the National Lottery Heritage Fund, to assess what financial difficulties the current coronavirus crisis is causing for environmental and conservation charities, and how they may be able to assist and support the sector.

24.3          Environment and conservation organisations have almost universally already been affected by the coronavirus outbreak with only 2% not yet impacted. 27% are either at high risk of becoming financially unviable in the coming months or they have less than four months’ worth of financial reserves to survive on.

24.4          For the 23 organisations who have been able to give estimated losses, they are set to face a combined loss in annual income of around £88 million, or an average loss of almost £4 million. 

24.5          The issue affecting the highest number of organisations currently is the postponement or cancelling of planned events or projects, affecting 98% of eNGOs, with this problem and overall loss of revenue hitting them hardest. Almost three-quarters of organisations polled said they expect to hit funding restrictions in coming months, with half already finding their funding affected.

24.6          The priorities highlighted for government are to: provide emergency funding which helps cover core costs, in particular staffing; ensure that charities have the same protections and support as businesses; and providing flexibility for existing funding and guarantees that funding applications for projects for next year are not delayed.

25.  Woodbrooke Quaker Study Centre

25.1          This charity, established in 1903, offers learning and education for Quakers and others. Covid-19 has presented incredible challenges for the organisation. Over 2/3 of their income (£1.8m) has abruptly ceased with the closure of their learning centre, and all face-to-face courses and events. Trading and subsidiary services that usually Gift Aid around £80k per year have also ceased. The organisation’s employment policy prevents enforced furlough, cuts in pay, or cuts in hours, so although the 80% furlough is being accessed they will struggle to meet ongoing salary costs if employees are unable to take reduced pay/unpaid sabbaticals.

25.2          Many of the schemes in place are inaccessible to this organisation. Business rates relief is not an option as they own the building they operate in; the £25k grant to the hospitality sector is an option, but as their output is not exclusively in hospitality they have concerns that they risk losing their charity business rate relief. Despite significant financial pressure, the organisation is working hard to connect people via online learning and keep worship going, especially amongst the vulnerable, elderly and isolated. This of course means that furloughing staff, when such vital services still need to be delivered, is not feasible. The organisation is facing a tension between financial survival, and doing the right thing for the beneficiaries they serve.