Five things we learned when we asked the government for funds to help charities and social enterprises through Covid-19

For several weeks, voluntary sector leaders have been warning that Covid-19 would lead to the collapse of numerous charities – many of whom are trying to provide vital services to people in need during this crisis. Last week, there was a sigh of relief as the UK Chancellor finally announced a £750m package to support frontline charities. But it's far from enough to save most of them, never mind social sector organisations with a different legal structure. David Floyd, managing director of a London-based community interest company, reflects on why the sector has been so poorly served.

Announcements about funding to support the UK social economy through Covid-19 are like buses on poorly-run bus routes. You wait ages for them to come and when they finally arrive they’re going to the wrong destination and they break down immediately. 

After several weeks of nothing, Chancellor Rishi Sunak produced this. Funding for hospices is positive but, given estimates that charities will lose at least £4bn during the first 12 weeks of lockdown, the £350m allocated to small community charities (around 150,000 of them even if social enterprises are not included) is nowhere near enough for those organisations and it ignores many larger charities (supporting millions of vulnerable people) entirely. 

It also stacks up particularly badly against the £585m worth of business rates relief given to a single supermarket group (Tesco), who are about to pay £635m in dividends to shareholders. 


Furlough blow

Alongside this glaringly insufficient funding offer, the Chancellor has (so far) declined to make widely requested amendments to enable charities and social enterprises to take advantage of his (generally very good) ‘furlough’ scheme to support workers. 

The result being that many not-for-profit organisations – including my own – face the bizarre choice between receiving large amounts of public money to pay staff to do nothing, or attempting to carry on serving our communities while receiving no public money at all. 

Many not-for-profit organisations face the bizarre choice between receiving large amounts of public money to pay staff to do nothing, or attempting to carry on serving our communities while receiving no public money at all

Aside from the Kafkaesque nightmare (from a social organisation’s perspective) of the furlough model, many charities and social enterprises are also unable to access the £10,000 grants for small businesses – which are generally on offer to any business that operates from commercial premises. 

Why are social organisations getting so bad a deal? Here’s five possible factors:


1. The Tories now like charities even less than they like trade unions 

What was both impressive and surprising about Rishi Sunak’s package of support for business and employees was that it was clearly the result of extensive discussions with both business leaders and the TUC

Since the 1980s at least, Conservative governments have not been well known for their positive relationship with trade unions. Given that the chancellor has taken such honourable and meaningful steps to reach out beyond his own party’s support base to shape interventions to protect so many employees, it’s worrying that he has chosen not to offer significant support to charities and social enterprises. 


2. Government does not recognise the social economy as part of the economy 

As someone who only dips into policy debates about ‘the sector’ as a relatively small part of my wider day job, I have always regarded umbrella leaders’ concern about the voluntary sector being parked in an obscure governmental siding at the Department of Digital, Culture, Media and Sport as a niche moan. 

Who cares which Whitehall office civil servants are politely ignoring us from? 

Well, perhaps we should all start caring more because, while the Treasury shaped support to meet the needs of business, there was apparently no one in the room to point out that there are at least 100,000 UK businesses which are no less businesses than others but which have social aims that have a significant impact on their business models. 



3. Much of wider society is either cynical about or indifferent to social economy organisations 

Covid has seen widespread public support for measures to help workers, alongside a ramping up of existing public support for the NHS demonstrated by a collective weekly round of applause, and multiple high-profile fundraising initiatives. 

It’s been a different story for charities and the wider social economy. While many local people have enthusiastically volunteered for or donated to local charities as part of their response to Covid, there has been very little evidence of widespread public recognition for the collective role of charities and social enterprises in supporting the nation’s social infrastructure. 

While the public rightly seem to be able to distinguish between Philip Green’s management of BHS and the wider world of business, negative views of charities seem to have cut through

There are lots of justifiable reasons why members of the public might quite reasonably be cynical about some aspects of recent ‘charitable’ behaviour – whether it’s the Presidents Club’s grotesque luxury misogyny in a good cause or Kids Company’s personality cult-driven  mismanagement.

But, while the public rightly seem to be able to distinguish between Philip Green’s management of BHS and the wider world of business, and (equally rightly) don’t blame everyone working in the NHS for the failings at Stafford hospital, negative views of charities – and perhaps social organisations more widely – seem to have cut through. 


4. The Charity Commission’s policy stance has serious knock on effects  

Once again, usually a relatively niche concern, recent years have seen ongoing (and possibly growing) disagreement between the Chair of the Charity Commission, the former Conservative peer, Baroness Stowell, and sector leaders about what charities are for. 

While she may have been doing other work behind the scenes, Baroness Stowell seems to have spent most chairship going round telling conferences and national newspapers that charities are really bad and need to improve. 

Part of this reflects anger felt by large sections of the public – and most people involved with charities – about some appalling high-profile scandals but there is a policy aspect that comes alongside it. 

Examples include Baroness Stowell’s comment that: “... over recent years, we’ve seen charities losing sight of what they stand for in pursuit of organisational advantage. We’ve seen charities engage in pressure-tactic fundraising, supposedly justified by the money that raises for the cause. We’ve seen charities that should be working together instead competing for scarce resources.”  

Described in less pejorative terms, all the practices criticised here are – rightly or wrongly – realities of the ‘market’ for charitable resources: a market that successive governments have been significantly responsible for shaping. These points represent a policy-based objection to that situation – and raise the possibility that part of the government’s reluctance to support charities (in particular) is because it doesn’t like the business models of the sector as it currently stands. 


5. Social sector lobbying is well intentioned but (currently) ineffective 

Over recent weeks, an awful lot of MPs have signed an awful lot of letters to ministers, NCVO CEO Karl Wilding has put the case to the DCMS select committee and some sector leaders have barely stopped tweeting to have their dinner – but it hasn’t worked. 

Despite the heroic efforts of Karl and others, on the basis of the gap between what’s needed and what’s been delivered, this is (so far) the least successful lobbying effort by the voluntary sector and the wider social economy since the word lobbying entered widespread usage. 

This is (so far) the least successful lobbying effort by the voluntary sector and the wider social economy since the word lobbying entered widespread usage

As it stands, 10s of 1000s of organisations are likely to go out of business, while many more will keep going but will never truly recover from the damage, with the result that millions of people will miss out on vital social support that would otherwise have helped them make it through this crisis. 

At a time when, in many other ways, the government is doing so well in handling a horrific situation, this represents a massive failure of policy and imagination. But maybe it’s partly our failure too.

A longer version of this blog was first published on, and is republished here with permission. Header photo by jplenio on pixabay.

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