The economic crisis arising from the Coronavirus outbreak is having far reaching effects on charities both locally and nationally. For many smaller charities in particular that have a "hand to mouth" existence the stark reality is that they may not be around when we emerge from the national lockdown and start returning to "normal" whatever the "new normal" is going to be. So what should charities be doing now?
The Charity Commission has issued guidance entitled 'Coronavirus (Covid-19) guidance for the charity sector'. Whilst this does give general comments and advice is does not (and cannot) give individual charities the immediate advice and guidance as to how to deal with this ever-developing situation. It is then left to trustees and their senior management teams to find ways to survive not just in the short-term but in the long-term.
The role of the trustees of a charity has never been more important. With many of their staff being put on furlough leave under the Government's Workers' Support Package trustees must ensure that they are fully in control and make informed decisions. Trustees are not paid and are effectively volunteers. They need to ensure that there is a charity to return to when lockdown ends and staff are able to return to work.
If charities have not fully considered furloughing staff they need to do so urgently. We are available to advise on the repercussions of this although this is an area that is constantly changing. The "devil is in the detail" which was not announced at the time that the scheme itself was announced by the Government. It is going to be vital that charities that go down the route of putting staff on furlough leave do this in a way so they receive the grant from HMRC to cover wages or most of the wages of their workforce. When lockdown ends it will be too late if this has been done in the wrong way.
Charities will need to consider whether to use reserves to manage their financial situation through the crisis and what restrictions there might be on funds that they hold. More mundane issues such as how to hold AGMs and administration aspects are still important to be considered and decisions made about. Do not forget governance even in this very changed situation.
Charites (along with all businesses and organisations) need to remember that the General Data Protection Regulation is not suspended during this pandemic. The Information Commissioner's Office has indicated that whilst they will be very supportive they cannot change the legislation about timescales when steps have to be taken. With more and more people working from home the risk of data breaches becomes higher and the need for everyone to be more vigilant but with a degree of common sense. Whilst GDPR is not high on anyone's agenda at the moment the basics still need to adhered to and most charities have already put in place steps to help their staff understand the requirements. Now having policies in place will pay dividends.
The role of charities in communities is vital. This will continue when we start returning to normality and in fact charities will then become pivotal to emerging from that crisis. Supporting those in need throughout the country and delivering essential services. The danger is that the lessons that we are learning from this pandemic may be forgotten so it is vital that charities make crucial decisions now that secure the long-term future of their organisations, not just to provide secure employment for their staff but also to be able to deliver their charitable objectives. This is an incredibly difficult time for everyone in the country and for all businesses but especially charities. The role of trustees has therefore never been more important. Speak to your accountant and solicitor to take advice on the options. With many people on furlough leave the danger is that charity trustees will feel isolated and unable to make the crucial decisions that need to be made. The Clapham & Collinge Charities Department remains 'open for business' and whilst we are largely working remotely from home we can still give you much needed support and legal advice to help you get through these very difficult times.
For more information on the legal services we offer to charities, visit our dedicated charity services webpage, call 01603 693500 or email us using the 'Make an enquiry' form.
*This article is provided for general information purposes only and does not constitute legal advice or other professional advice.
