More than wealthApril 1 2020

Charities in the time of Covid-19

3 mins read

Charles Peacock

Director, Family Office Services

It is clear that Covid-19 is an unfolding humanitarian crisis that will affect all countries. It presents a serious threat to the life of those who catch it and puts severe pressure on those working in the health services, while exposing them to the very same risks. At the same time, measures to combat its spread are turning lives upside down. Self-isolation and social distancing have given way to lockdown in many countries, with gatherings prevented and extensive restrictions on movement.

The financial impact on individuals and businesses has been extensively covered in the media. Less seems to have been written on charities, but they have been equally affected. As with businesses, the impact on each charity, their staff and clients (beneficiaries) will vary enormously according to the nature of their work, how they deliver it, the flexibility of their cost base and the source of their income. In this brief note, I highlight just some aspects and examples of what is an inexhaustible topic.

For some charities, the measures to combat Covid-19 are quite simply preventing delivery of their mission; for example the Jubilee Sailing Trust (www.jst.org.uk). This charity uniquely brings people of mixed abilities together through inclusive adventures at sea, allowing them to explore their ability and appreciate the ability of others. There has been no alternative but for it to stop all voyages.

Other charities will be finding that more is being asked of them. The loss of jobs, income and enforced isolation is a source of anxiety and stress and will likely exacerbate mental health issues. While events, meetings and courses may have been an important element of the delivery strategy of charities addressing these issues, extensive use was already being made of telephone and online resources to provide information and support. Innovation and increasing use of digital media and applications are helping to fill the gaps that the cessation of physical gatherings has left. At the same time, this may enable the charities to operate, temporarily at least, with reduced costs.  

A third category of charity is one where the demand for their services is increasing but there is no meaningful substitute for the way they deliver their mission. Examples in the UK would include hospices and other health/medical-related charities that provide care residentially and in the community. These are being asked to do more as healthcare resources within the National Health Service are focused more heavily on dealing with Covid-19.

While all of this is happening, most charities will be seeing a squeeze on income. Previous economic and financial market downturns have typically impacted on the level of grants from companies, charitable trusts and major donors. The fall in value of investments and property also affects the value, if not the number, of legacies. We can expect to see this pattern again in the coming months.

What will not have been experienced before, at least in the way it is now, is what is happening to community fundraising. This is a vital source of funding for many charities; it provides unrestricted funding that enables them to operate effectively and also raises public awareness of their work. Self-isolation and lockdown means that volunteers are not able to collect on the streets – the timing could not be worse for Marie Curie (www.mariecurie.org.uk – the UK’s largest charity providing end-of-life care in hospices and in the community) for example; its ‘Great Daffodil Appeal’, which normally takes place in March, is a major plank of the charity’s annual income generation.

More broadly, the cancellation and/or postponement of mass events, such as the London Marathon, and individual or small group activities have brought community fundraising to a juddering halt and the lockdown has come at the time when many of these activities would otherwise take place. The spring and summer months normally represent their peak period.

Their level of consequent need will vary from charity to charity according to their particular mix of income sources and the impact of Covid-19 on their operating models. What is nonetheless clear is that a great many will still need some conscious and thoughtful additional financial support to keep going.

While government initiatives to support businesses are available to charities as well, these may not be straightforward for all to access. We also anticipate that there will be a time lag in actually obtaining financial support in any event. This view is evidently shared by many charities, which have launched emergency appeals for grants and donations to meet the anticipated income gap.

Learning about the work of charities, supporting and engaging with them can be rewarding for individuals and families. As with other areas of our work, Sandaire is here to assist our clients with their philanthropy, but would note that we do not seek to advise on the specific choice of charities to support. Please do not hesitate to contact our Family Offices Services team if you have any questions about developing and implementing a philanthropic programme.