Coronavirus: updated guidance for the charity sector

The Charity Commission has updated its guidance to help with running a charity during the Coronavirus (COVID-19) outbreak.

The government has announced that organisations, including charities, will get support to help them pay wages.

Employers will be able to contact HMRC for a grant to cover most of the wages of their workforce who remain on payroll but are temporarily not working during the coronavirus outbreak.

Any employer in the country- small or large, charitable or non-profit will be eligible for the scheme.

Can I use reserves and restricted funds to help my charity through the crisis?

In the first instance, the Commission says trustees should consider what are their short, medium and longer term priorities, and see if they need to amend their financial planning given their current situation.

Trustees are asked to consider whether or not certain projects, spends or activities can be stopped or delayed in order to focus on essential spending if they are facing financial challenges at this time.

Reserves can be spent to help cope with unexpected events like those unfolding at present.

The Commission advises charities to identify which of their funds or assets have limits on their use. If these are internal only - for example a charity has decided to earmark certain funds for a particular purpose - then it may be possible to re-prioritise these.

If they are restricted funds, meaning they cannot be spent at the trustees' discretion, then they may only be used for a particular and defined purpose. For example, a fundraising appeal may restrict funds to a specific purpose, or if there is a permanent endowment, it may have restrictions on selling it to release funds.

If there are restrictions, says the Commission, there may be ways to amend them, but accessing or releasing restricted funds should only be considered if other options, such as reserves, are not possible.

The Commission is encouraging charities to also carefully consider the wider and longer term impacts of making such a decision on their financial resilience and donor relationships.

Professional advice may be required.

The Commission advises that all financial decisions should normally be taken collectively, and significant decisions and action points noted in writing.

The Commission has more detailed guidance on financial resilience; on charity reserves; and a general tool to help trustees work out what to focus on.

Can I cancel or postpone my charity’s AGM or other key meetings?

Coronavirus is having a major impact on charity events and the government’s health advice may lead to some charities having no choice but to decide to cancel or postpone their AGMs and other critical meetings.

If trustees decide it is necessary to do so, they should record this decision to demonstrate good governance. This is particularly important if it is not possible to hold the AGM, which may make it difficult to finalise annual reports and accounts.

Wherever possible, the Commission asks that charities submit their annual reports on time. However, where the situation impacts on the completion of annual returns and accounts, charities with an imminent filing date can call the Commission on 0300 066 9197

Can I use video, teleconferencing and the internet in place of face-to-face meetings?

The current situation makes it difficult to hold face-to-face meetings. Some charities have clauses in their governing documents that allow them to meet virtually or to use telephone facilities, so trustees should check their governing document to see if they can make amendments themselves to facilitate changes as to how or when meetings are held.

Where there is no such clause in the governing document and the trustees decide to hold meetings over the phone or using digital solutions, the Commission says it will understand,  but this decision should be recorded to demonstrate good governance.

What do I need to report to the Charity Commission?

The current coronavirus pandemic creates challenges for charities, but their primary interest must be looking after the public and the communities they serve.

The Commission reminds trustees of the need to report serious incidents using its current guidelines, bearing in mind that trustees should use their judgement in deciding whether an incident is significant in the context of their charity and should be reported.

Incidents that place individuals at risk, or incidents that have had a significant impact on a charity’s operations and therefore cause serious harm to a charity’s work will continue to take priority with the Commission..