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Charities and COVID-19: let's walk in beneficiaries' shoes

15 May 2020: Let’s try walking in the shoes of beneficiaries is the plea from Debra Allcock Tyler, chief executive of the Directory of Social Change (DSC), commenting on the fall-out from COVID-19 for charities.

“What can you do as accountants to help charities survive?” asks this heavily invested charity chief executive. “This is about vulnerable people not charities per se.” She continues: “It’s the services charities provide that matter; not the jobs, not the revenue, but the impact on citizens.”

Debra Allcock Tyler is a dyed-in-the-wool charity and voluntary sector advocate. She leads DSC, which provides training courses, publications, online funding databases, research, conferences, a bookshop and lots of other support to charities. DSC – much like ICAEW – fights for the best policy outcomes for those it supports, and does so with gusto.

In a briefing by a coalition of charity infrastructure organisations headlined “Never more needed” for a House of Lords debate at the end of April 2020, there are some useful numbers to conjure with: “The sector has an economy worth £42bn; has access to over 20m volunteers; almost a million trustees; in the UK alone serves 62m people in various ways and is a leader in supporting vulnerable people, communities and causes across the globe.”

At the start of the COVID-19 lockdown, the loss of income to the sector was calculated to be £4.3bn over just 12 weeks, says the briefing. With all the help from government schemes, grants and fundraisers, the funding gap is still around £1bn – and that is just for this initial 12-week period. This slashing of income comes at a time when demand for services is so obvious, in the most heightened of circumstances.

Yes, a £750m UK-government relief fund has dropped into place, and various government COVID-19 schemes are available to the charity sector in the same way as they are available to businesses, but there is a gap, and there is a problem.

“The problem is that the government has equated charities with businesses and this is just not the case,” says Allcock Tyler. “If a business fails, that is terrible. If a charity fails, people lose their lives. It is not the same thing.”

She continues: “The Coronavirus Job Retention Scheme works well for businesses. It is a disaster for charities. We need people working. If a business has no income there is no work. But if a charity has no income there is still work. There are still the homeless, the terminally ill, the abused, the poor, the hungry.” Despite the cash crisis facing charities we have all seen a tsunami of activity from the charity and voluntary sector. Food is being delivered, medicines are being distributed, personal protective clothing is being made, emotional support is being offered, loneliness is being relieved, logistics is somehow just happening, and there is an abundance of caring. This sector is the backbone of all that.

Furloughing staff is a problem for charities at a time of such unprecedented need, she says. Charities are having to make difficult decisions about whether to burn though reserves to meet need, or furlough staff to preserve cash. Should a charity gamble on the present or its future? If it bets on future survival and furloughs staff, that puts whole teams out of action. She reminds us: “No one wants to compromise around the furlough decision for fear of an accusation of fraud.” There are many sobering thoughts at this time.