Major charity groups have called on the Government to do more to support not-for-profit organisations affected by Covid-19 in 2021.
The “Five-Point Plan”, which comes ahead of the March Budget statement, brings awareness to the “£10 billion funding gap” currently experienced by the sector.
Developed by the Charity Finance Group (CFG) in collaboration with the Chartered Institute of Fundraising, the Association of Charitable Foundation, the Association of Charitable Organisations and others, the plan sets out how the Chancellor Rishi Sunak can help non-profit organisations this year.
The proposals include:
- Financial support for local areas placed in tier levels 2 and 3, including an element of direct funding for locally based voluntary organisations working to support directly affected local communities.
- Changing the effective tax rate at which Gift Aid is paid for a two-year period to 25 per cent and removing the “matching rule” so that the eligible donations can be claimed under the Gift Aid Small Donations Scheme (GASDS).
- Repurpose and access stranded funds, such as the National Fund and Community Wealth Fund, to support charity services.
- Repaying lottery distributors from the 2012 London Olympics so that the funds can be redistributed among small charities and community groups.
- Ensure the effective and efficient distribution of the Shared Prosperity Fund (UKSPF); and
- Increase core Government funding to strengthen the long-term financial sustainability of local authorities.
The plan comes after research found that a loss of donations and commercial revenue is likely to leave a “£10 billion hole” in the pockets of charities in 2020/21. This could result in six in 10 (58 per cent) organisations reducing services and two in 10 (23 per cent) making cut backs and redundancies.
Speaking to the Chancellor ahead of the March statement, the CFG said: “We ask you to deliver on your claim to make changes when necessary to ensure that this Budget delivers for social change organisations and the unique role they occupy in our economy to deliver public benefit.
“Our sector is essential both to the immediate response to Covid-19 and to the medium and longer-term ambition to level up and build back better. Our nation needs our charities and social change organisations to play their part and your Budget must enable them to do so.”
The report comes after the CFG also called on the Government to create a Coronavirus Job Retention Scheme (CJRS) fit for the third sector.
The group said the scheme – which supports jobs by covering the costs of salaries of employees who cannot work – should be adapted to non-profit organisations, such as by allowing employees of charities to continue to work while still receiving support to deliver vital services.
For help and advice with related matters, please get in touch with our expert charity finance team today.