2020-03-19
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How coronavirus (Covid-19) might affect charities and not for profits

Home / Knowledge base / How coronavirus (Covid-19) might affect charities and not for profits

Posted by Naomi Whitfield on 19 March 2020

Naomi Whitfield - Business and Corporate Law Solicitor
Naomi Whitfield Solicitor

Charities, like everyone else, may find themselves struggling to adapt to the fast-moving situation created by Covid-19, however it’s incredibly important to ensure these organisations are in a position to provide their services and support in the current climate.

We’ve put together this brief guide to ensure charities and not for profits know what they can do to pandemic-proof themselves:

Filing

Charities have an obligation to ensure they make their annual filings on time, and keep the Charity Commission updated as to their circumstances, especially if these are likely to change drastically in the imminent future, and last week this position was reiterated after it said that charities severely affected by the coronavirus outbreak might need to file serious incident reports

Clearly, in the current environment, it’s difficult for anyone to make such a judgement call and the Commission found itself coming under fire for its lack of guidance. The Commission has since changed its position, saying that it will consider granting an extension to any charity that is struggling to file its annual return because of the coronavirus pandemic.

The Commission said in a statement on 17 March that it wanted charities to be reassured its approach to regulation would be “as flexible and supportive as possible” and that “charities can feel confident that we will, where possible, act in a pragmatic way by taking account of the wider public interest during this unprecedented period.”

If you are due to file your charity’s annual return imminently but are or feel unable to do so, you can request a filing extension. The Commission has confirmed that requests for filing extensions would be made on a case-by-case basis.

Funding

With the Chancellor’s announcement on Friday of a £330 billion injection for the British economy being silent on the position for charities and not for profits, many may have been left wondering how they will survive the pandemic, or whether they can meet obligation they might have to funders.

The National Lottery Community Fund has today said it will be flexible with grant recipients if they are adversely affected by the coronavirus pandemic. The Chief Executive of the Fund said the fund wanted to support charities and community organisations as much as possible at a difficult time and that they would look to accommodate changes to activities and timelines because of the outbreak and consider any requests for support if organisations experienced financial pressures as a result of the situation.

This will come as welcome news to many charities supported by the National Lottery, but many more are set to face funding difficulties, as social distancing comes into effect and fundraising event including the London Marathon are postponed or cancelled. However, a group of 130 charitable grant makers have led the way in reassuring charities that they support that funding would not be withdrawn during the current crisis and that they would also be flexible on how funding is used.

If you’re concerned about how your organisation will fare financially, we would recommend getting in touch with your donors, funders or grant makers and putting in place a contingency plan. You should also carefully review any insurance policies you have in place to ensure you’re utilising them properly.

Moving forward

Advice to charities as to how to manage to evolving situation is, as with all current advice, changing rapidly, however all charities should be taking steps to drawn up plans to deal with the possible effects of the coronavirus outbreak on their workforce and service offering. Ultimately a charity must always function for the public benefit, and charities should ensure they are able to adapt to meet the changing environment.

About the author

Naomi specialises in a range of corporate law matters including mergers and acquisitions, MBOs, disposals, takeovers, and corporate restructuring.

Naomi Whitfield

Naomi specialises in a range of corporate law matters including mergers and acquisitions, MBOs, disposals, takeovers, and corporate restructuring.

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