Coronavirus (COVID-19) general guidance and FAQs for Charities

Do our charitable objects allow us to help with COVID-19?

The Charity Commission has issued guidance as follows:

“Naturally, lots of charities are considering whether they can help the effort to tackle COVID-19 and its severe impact on people right across the country. You should first consider the terms of your charity’s existing charitable objects. These are set out in your governing document.

Objects that might already allow you to offer support include:

  • the relief of poverty
  • the relief of need, hardship or distress
  • the relief of the elderly
  • the advancement of education or advancement in life of young people
  • the advancement of health.

Trustees of charities with other objects may also be able to adapt and respond to COVID-19 either directly or indirectly. For example, a charity with an object to advance religion may be able to offer support as part of its pastoral work. An arts charity might help relieve isolation through its online work. Your charity may also have a general object that allows you to act for any charitable purposes, or an object that allows you to support the general benefit of a local area.

In considering what you can do under your existing objects you will need to check whether your objects have restrictions, for example, to benefit a particular local area or class of beneficiaries.

If your existing objects do not allow you to help, you may be able to amend your governing document to change them. But consider carefully:

  • whether there are other charities that may be better placed to respond than yours
  • the wider and longer-term impacts if you use your charity’s money for purposes other than those for which it was raised. Your existing beneficiaries - whose needs may be less pressing but no less deserving - may also lose out.

If you want to change your charitable objects, you should check to see whether your trustees have the powers to amend them, for example using an express power in your governing document. If not, you may need permission from the Charity Commission. For example, if your organisation is a company or a CIO, a change to the objects is a ‘regulated amendment’ which would require our consent.

Any changes proposed should be reasonable, consistent with what your charity does, and not undermine your existing objects. The Commission will prioritise requests required urgently because of COVID-19.”

I/we would like to set up a charity which is related to the current COVID-19 Coronavirus pandemic. Can you help?

We can help! Please get in touch with either of the contacts named on this page who will be happy to discuss your proposals and consider how they can best be taken forward.

Do you have any specific advice / guidance for Almshouses?

Clearly the most difficult issues for Almshouses will be taking steps to assist vulnerable beneficiaries who are resident in the Almshouses and, where possible, helping them with arrangements to self-isolate. If you currently have voids, you may also want to consider whether, in accordance with your Objects, you are able to make such voids available to the vulnerable in society that may have a need at this time. For more detailed advice specific to Almshouses we would refer you to the guidance available from the Almshouse Association.

We are a charity-registered school with queries about employees and pupils. Where can we find more information?

We have a wealth of advice and information here

Our organisation is reliant on visitor footfall, what practical steps do we need to take to guard against a significant drop in income?

You should contingency plan for various scenarios, and should model income being lower than previously anticipated and consider how long you can continue to operate and trade, possibly using reserves to do so. It may be that, depending on the financial position of the organisation, you ought to be speaking to your bank at an early stage should you anticipate cashflow challenges. By contacting your bank early, they may be able to work with you to put a manageable plan in place for your organisation in the circumstances.

This is something to consider carefully with your finance advisers and at Board level. On a practical basis, we recommend that you:

  • Monitor carefully visitor footfall and identify whether you are experiencing significant drops.
  • Do not assume that this is a temporary blip and will recover quickly.
  • Identify what costs you are able to control at this stage, i.e. can you defer ordering items for the gift shop for example?
  • Consider your reserves and reserve policy and identify the likely impact on your reserves.
  • Model the effect of a, for example, 25% / 50% fall in visitor income and plan accordingly.

You may also need to consider employment and HR advice to consider the options available in terms of managing staffing need in these conditions. We answer some FAQs on Coronavirus in the workplace here

We are hosting an event at an external venue in two months. If we cancel it, will we still have to pay suppliers?

It really depends on the cancellation terms. A third party may be willing to allow you to postpone events at the moment, but that may require negotiation if the terms are not clear on this point.

Many service or goods contracts will contain a force majeure clause which allows services/goods to be suspended in the event of an Act of God. Check any definitions in the agreement although this should typically include an event such as a pandemic. It may be that the practical effect of this type of provision is limited if a third party has already performed their function or you have paid in advance for something. It may still be worth trying to negotiate in the current circumstances. We recommend that you seek legal advice before invoking a force majeure clause, so that you fully understand your rights.

Do also keep an eye on any updated Government guidance. If the Government bans large gatherings, for instance, and the event in question is affected, your liability to the venue and to any delegates may change under the terms and conditions. Obviously it will be down to what the contract/Terms & Conditions say, particularly vis-à-vis force majeure. It will be helpful to plan for all eventualities early on.

We hire out our building for events but people are cancelling. What are our rights?

It will depend on the terms of your hire arrangements so you’ll need to check the cancellation terms. Your terms may contain force majeure clauses that allow a period of relief in performance where circumstances arise that are beyond the parties’ control. If so, we would advise that you seek legal advice where anyone cancelling an event is seeking to rely on force majeure, so that you fully understand your rights.

Commercially and where possible and practical, you may wish to allow people to move dates until later in the year as this will also help with goodwill and reputation.

We are a charity. What steps should we take to protect our organisation in relation to future fundraising events and appropriate T&Cs?

We advise that you take the time now to familiarise yourself with your contracts, policies and continuity plans.

Where possible, ensure that funds are given without conditions attached.

By ensuring that the charity has up-to-date and helpful contact details for donors or beneficiaries alike will mean that mass communication can be carried out where needed.

We need to hold a meeting electronically, rather than in person. Is that possible?

For organisations which are companies (such as CICs or charitable companies), you can find further information here.

The position is very similar for organisations which are CIOs. For a members’ meeting, do check the constitution to see what is permitted.

Generally, whatever your legal form, you may decide to hold a trustees’ or directors’ (but not a members’) meeting electronically, unless the constitution specifically prohibits it. The electronic means chosen should allow trustees to see and hear each other, for example using video conferencing facilities. For non-companies, relying only on telephone conferencing is more complicated unless it is expressly permitted in your constitution.

As well as the above, consider whether you might be able to resolve to take actions in writing instead. This will depend on your legal form, again, but if the group all agrees (such as a written resolution of the entire Board), this is likely to be low risk.

In summary, review your constitution first and foremost and be aware that convening members’ meetings electronically is generally more complicated. We would be happy to assist with any specific queries.

We are a theatre with charitable status that has had to cancel a ticketed event as a result of Coronavirus. Some of our patrons have agreed to donate the value of their tickets to our charity even though the event has been cancelled. Can we automatically claim gift aid?

There has been a response to a written parliamentary question from the government as follows: “Theatres and other cultural venues recognised as charities by HMRC can claim Gift Aid on freely given donations, as opposed to payments for goods or services; such as admission tickets. These charities can claim Gift Aid on the value of tickets for cancelled events if the patrons have agreed not to be refunded for the cost of the ticket and agree for the same amount to be treated as a donation. Additionally, the charity will also need to make sure the patrons have made a Gift Aid declaration for their donations to qualify for Gift Aid, confirming that they have, or will have, paid enough tax to cover the amount the charity will claim on their donations.

The law and practice referred to in this article or webinar has been paraphrased or summarised. It might not be up-to-date with changes in the law and we do not guarantee the accuracy of any information provided at the time of reading. It should not be construed or relied upon as legal advice in relation to a specific set of circumstances.

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