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Coronavirus: government announces emergency support for the Third Sector

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Posted by Robert Lee on 14 April 2020

Robert Lee - Head of Corporate Law
Robert Lee Partner - Head of Corporate

Following increasingly desperate calls, the government announced a number of measures to help support charities and not-for-profits during the COVID-19 crisis on 8th April 2020. It was acknowledged by ministers that the work the Third Sector does is vital during this time, and to lose services which support those most in need would place further strain on the NHS and other vital systems.

The Chancellor announced that £750 million of funding would be made available for the charitable sector; £370 million of this will be for small local charities working with vulnerable people in their communities and £60 million would be for use in Scotland, Wales and Northern Ireland. These funds would be allocated using the Barnett formula (a mechanism used by the Treasury in the United Kingdom to automatically adjust the amounts of expenditure allocated to Northern Ireland, Wales and Scotland).

A further £360 million will be made directly available to charities providing essential services and supporting vulnerable people, of which £200 million will be allocated to hospices and organisations such as St John’s Ambulance, the Citizens Advice Bureau, domestic violence charities and those supporting the disabled.

The Government also threw their weight behind the BBCs “Big Night In” charity appeal on 23 April 2020 by pledging to match pound for pound whatever the UK public donates. This will start with a £20 million contribution to the National Emergencies Trust appeal.

This support from the government will come as a boon to the Third Sector. Many charities have recently made public announcements that they will not be able to survive the current period without government support, and there have been reports that charities across the board are furloughing workers and preparing to streamline their operations in order to survive.

If you represent, or work for a charity or not-for-profit facing difficult decisions at the moment, we would advise you to access emergency funding which is available through several channels:

  1. National Emergencies Trust:

The National Emergencies Trust (NET) has launched an appeal to raise funds for local charities and grassroots organisations that have been impacted by coronavirus. The trust is planning to distribute grants through a network of local community foundations. Organisations will need to apply directly to a community foundation, not to the NET.

  1. National Lottery Community Fund:

All National Lottery funding decisions in the next six months will be devoted to responding to the COVID-19 crisis. Existing grant holders and applicants with activities specifically geared to supporting communities through Covid-19 with be prioritised, followed by organisations faced with liquidity issues caused by COVID-19.

  1. The Emergency Loan Fund for Charities and Social Enterprises (Big Society Capital):

A fund to allow social lenders, including the Charity Bank, to provide emergency loans to affected charities; they will require no personal guarantees and no fees or interest for 12 months. Applications open in mid-April.

Other organisation and banks, including John Lewis, Barclays, Tesco, Sports England and Arts Council England have also announced initiatives to support both national and local charities. Trustees and charity representatives should be reassured by this financial support which, along with other measures announced by the Treasury, is one of the most comprehensive support packages in the world for the Third Sector.

About the author

Robert Lee

Partner - Head of Corporate

Robert specialises in mergers and acquisitions, and corporate restructuring.

Robert Lee

Robert specialises in mergers and acquisitions, and corporate restructuring.

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