Ana_VBI_120px-circle

Ana-Julia Van Bilsen Irias

Investment Executive

Charities Aid Foundation

Tips for social organisations 

during the Covid-19 crisis

13 May 2020

The full consequences of the Covid-19 pandemic and response are not yet known, and we do not expect the full impact to become apparent for about six months.

At the beginning of April the Chancellor announced a £750m package of support for the charity sector, of which £370m will be directed to smaller charities.  Since the outbreak started over 500 emergency funds launched for social organisations, although most are either very specific, or may already have closed due to the levels of demand.  For a full list of what is available take a look at CAF’s Covid-19 Hub.

Finally, on Monday 4th May the Government launched the Bounce Back Loans Scheme (BBLS) of affordable loans up to £50k.

Charities and social enterprises are under even more pressure to reduce costs, maximise income where possible, whilst still delivering their social impact and growing where possible.

We’d like to share some things for you to focus on.

 

780 dont give up

Cash is King

In these uncertain times keeping a close eye on finances is crucial, ensuring you understand where the key financial risks to your organisation lie among your stakeholders, funders, beneficiaries and suppliers.

Some things to think about:

  • Produce rolling weekly or monthly cashflow forecasts for the next three months.
  • Consider different scenarios and how each affects the organisation.
  • Negotiate with landlords and suppliers to build the longest possible runway for your organisation.
  • Strengthen governance; Trustees and Board members are essential volunteers, they need to remain engaged to provide essential support where possible.
  • Consider options around the deferral of VAT, or contact HMRC’s helpline for other possible deferrals such as for PAYE (HMRC’s dedicated helpline is 0800 0159 559.)
  • Apply for as much emergency grant funding as you can to potentially support the organisation through a much longer period of uncertainty.
  • Reach out to your existing banker, lender or social investor to understand what options they may have to help (i.e. repayment holidays, top-up loans or extension of facilities, etc.). Keep in mind that cashflow and plans will be requested. Remember that additional debt won’t necessarily be the most appropriate solution for every organisation; this money will eventually have to be repaid.


Coronavirus Job Retention Scheme “Furloughing”

The Government set up this scheme to support employees that otherwise would have been made redundant. Through this scheme organisations can claim for 80% of their employee’s wages up to £2,500 per month, plus any employer National Insurance and pension contributions, if they have put them on furlough because of Covid-19. The scheme is backdated to 1st March 2020 and currently runs until 30th June 2020.

Organisations may decide to top up the salary up to 100% of the furloughed employee’s normal earnings, but this is not a legal requirement. They must weigh up the medium term financial health of the organisation and the impact on its beneficiaries against the needs of its employees, whose living costs may not have changed due to home working.

To find out if your organisation is eligible go to the Government’s guidance page.

 



Everyone at CAF Venturesome is working hard to support our investees, where we possibly can.  Please get in touch  with our team on 03000 123 300 or email us at venturesome@cafonline.org and we’ll be happy to help.

If you would like more general advice, our friends at Good Finance are doing a brilliant job keeping social organisations updated with the resources you need at this time.  Here is the link to their COVID-19 Resource Hub.

RELATED CONTENT

CAF Venturesome Impact Report


This new report features our key achievements since launching in 2002 and compelling case studies from just a handful of the social organisations we work with.

Helping Communities Build


A review of Community Land Trusts by Sheffield Hallam University highlighting the need for start up support to solve the housing crisis.

Meet the team behind CAF Venturesome


An introduction to our team, who have a wealth of expertise in helping charities access social investment.


Charities Aid Foundation © | Registered Charity Number 268369
25 Kings Hill Avenue, Kings Hill, West Malling, Kent ME19 4TA
10 St. Bride Street, London EC4A 4AD
Telephone: 03000 123 000