Helena Neave

Helena Neave

Private Client Advisor
Charities Aid Foundation

E: philanthropy@cafonline.org

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CAF Coronavirus Emergency Fund Private Client Facilitated conversation 11 May 2020

Research by NCVO and Charity Finance Directors Group revealed that due to the current pandemic and UK lockdown, charities were reporting a 43% increase in demand for their services, but a 48% decline in voluntary income. This is made worse by the fact that over half of charities interviewed highlighted that they would only be able to survive for up to 12 months without additional funding, and within that, over a third reported survivability of up to six months. These are high levels, and of extreme concern.

In response to this, whilst unprecedented for CAF, we decided to launch the CAF Coronavirus Emergency Fund to help smaller charitable organisations in the UK navigate these challenging times. The fund was launched toward the end of March by repurposing around £5 million of legacies left to CAF to distribute in support of local charities.

On Monday, May 11 we hosted an update on progress of the fund for our Private Clients over Zoom, with Monica Brown, CAF Head of Charities Advisory & Programs, and Lorna Belsey, Senior Manager of Grant Making Operations. Below is a summary of the discussion.

Eligibility criteria

Charities can apply for grants of up to £10,000. The application criteria are:

  • Small charities and social purpose organisations with an annual income under £1 million
  • Delivering priority frontline services to the most vulnerable
  • Able to evidence an adverse impact as a result of the crisis
  • A track record of working with those beneficiaries

 

The response

Demand far outstripped supply, with applications from almost 5,000 charities requesting a combined £39 million in funding. With only £5 million available, CAF was unable to meet this vast demand and so the fund was paused on April 6th to respond to the applications already received.

We also appealed to all our clients to donate to the emergency fund. Thanks to their support, we have now received over £1 million with over £600,000 from Private clients. This has increased our fund to over £6 million and will enable more grants to be awarded.

Trends we are seeing

The most common request received is for unrestricted cash. Other requests include covering IT costs and transport costs to adapt the delivery of services to beneficiaries. During the event a question was raised whether there was the possibility, and opportunity, of partnering with IT companies to support charities. A big part of resilience should also focus on digitalising charities so they are better prepared for the future. CAF will investigate this during the Recovery phase.

When asked what priority needs are for funding, around 25% of applications request immediate cash to cover cash flow issues (e.g. salaries) and 25% request grants to cover delivery of activities and programs. The remaining 50% is a mix of both the above to respond to the need of beneficiaries.

Over 50% of all charity applications serve the areas of London, the SE, the NW, and Scotland (there was a slight lag in applications being assessed, and in turn number of grants being made, from Scotland, but these are expected to increase). Many of the applications focus on specific geographic areas, although some work nationally such as cancer or air ambulance charities.

Over half of the total grants distributed so far are to charities focusing on health, children and young people, and the relief of poverty.

Successful charity applications

Applications are assessed against the eligibility criteria. They are then sent to a Decision Making panel to review and prioritise. There are 10 panels that are made up of CAF employees with a range of experience from different departments. These panels meet on a weekly basis, reviewing around 500-600 applications. The panels ensure that we are able to achieve a spread of different cause areas and a good balance of charities across the UK. Charities are reviewed and prioritised against a framework, which covers questions including:

  • Who are the priority groups that they are responding to?
  • Are grants to be used immediately?
  • Are they experiencing an immediate cash flow problem?
  • How well have they articulated their issues throughout their application?
  • How will a grant help them? Why do they need this grant?
Successful applicants tend to deliver high priority services amongst the most vulnerable groups, or have deep connections and networks within the communities they serve.

How is CAF assessing the impact of grants?

Although the fund is designed for rapid response, we do consider what charities do and how the grants will benefit their constituents. We will take reach and impact prior to pandemic into consideration too. A greater focus on effectiveness and impact will feature during the Recovery phase. CAF recognises the risk that charities receiving our grants could still close during this unprecedented crisis, but we believe that the benefit of providing short-term funding to these charities to deliver vital support outweighs the longer-term risk.

How does CAF avoid duplication of grants to charities with similar projects, or who have applied for other emergency funds?

We do not have the capacity to do these checks at the moment as our priority is rapid response. A much greater focus on duplication will come into play during the Recovery phase. CAF is also discussing and consulting with others across the sector, such as the National Emergencies Trust and the Department for Digital, Culture, Media and Sport to ensure that emergency funds compliment, not duplicate, each other.  

Grant size

Grant size depends on how well articulated applications are and the needs of the charity. Some grant requests are reduced to be more appropriate for the length of time that the grants are intended for, or to be more inline with the charity’s operating budget.

Unsuccessful applications

We estimate that for every five applications, one is successful. A big part of this is due to the huge demand we are dealing with. Other reasons for unsuccessful applications include:

  • Ineligibility due to annual income being over £1 million
  • Insufficient information compared to other applications (also common in normal grant making applications)
  • Not working at front lines of the problem or with those most in need
  • Sizeable free reserves

 

How much have we distributed so far?

As of the week commencing May 20th, we have distributed over £2.2 million to 463 organisations.

What’s next?

CAF is working with 360giving to publicly share our fund data (available here). The aim of this is to be able to assess any trends or gaps that will better inform the Recovery and Resilience phases.

Our grant team will contact successful charities after six months of receiving their grant to provide a short update of how they have used and managed the funds.

CAF is beginning to think about the Recovery Phase, what the “new normal” could look like, and how we can support the re-building of a resilient civil society. However, our current focus is still emergency response.

How you can help

Donating to the CAF emergency fund would allow us to increase the success rate of applications and reach more charities.

COVID-19 will have long term consequences for the charitable sector. If you feel that you are not able to transfer funds immediately or would rather focus on the longer term, there will be other opportunities. Your funds could have significant impact during the Recovery phase. More information on what phases will look like will follow in due course. We are also working on creating a Roadmap for clients, based on feedback, that will lay out different areas for support during COVID and how to make donation decisions during this uncertain time.

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