Subscribers | Charities Management magazine | No. 132 Early Summer 2020 | Page 1
The magazine for charity managers and trustees

CORONAVIRUS COMMENT AND ADVICE

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Lymphoma Action’s Ropinder Gill – overall the biggest lesson that we have learnt throughout this time of uncertainty is the importance of staying true to the values of our charity.
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Stellar International Art Foundation and Path to Success’ Anita Choudhrie – the best thing we can do as leaders of the charity sector is to keep hoping and also appreciating our loyal donors.
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littlelifts’ Oa Hackett – it’s essential to tap into what people need right now, what is going to benefit them or add some value in some way to their life.
ACO’s Hannah Page – charities are now accepting proof of benefit entitlement as a main piece of evidence to show an individual needs their help.
Dogs Trust’s Owen Sharp – it has been key for us to work with the Government and other animal charities so we can understand how the ever-changing guidelines apply to our services, and ensure our approach is consistent.
Smile Train’s Ian Vallance – it was more important than ever before to make sure our supporters felt connected and uplifted, by continuing to engage with them through positive campaigns and initiatives.
Creative Land Trust’s Gordon Seabright – we’ve broadened our ability to serve our beneficiaries and built a whole new set of relationships and friendships.
EXPLANATION OF THIS CORONAVIRUS SECTION

CHARITIES MANAGEMENT editor RICHARD BLAUSTEN writes: The impact of the coronavirus crisis which will be with us for an indeterminate time is aptly summed up by Reza Motazedi, partner and head of charities and not for profit at Deloitte, when he says: “What is going on has affected everyone and every sector. It is fair to say we haven’t seen anything like this before.”

So in this special coronavirus section we run advice and comment from various advisers to charities concerning challenges and solutions, but also we run the stories from charities themselves about how they are responding to a situation that only a few months ago would never have featured in the smallest of ways in their thought processes.

So please keep scrolling down and reading the core of this special section: charities responding to coronavirus as described in their own words – and the lessons they would like to share with other charities. One cannot but be struck by the fortitude and resilience shown, strengths that perhaps remained undiscovered pre-coronavirus but which certainly will be needed in the days ahead.

Trustees should assert themselves in the current crisis

“Running a charity has just got more complicated,” observes Nikki Loan, director, charity and not for profit, at consulting and accountancy firm Deloitte, which outlines the way forward for trustees during the pandemic, saying: “Survival and recovery calls for process and control.” For trustees understandably shaken and daunted by the seemingly overwhelming challenges facing their charities, Deloitte’s message is for trustees to calmly and carefully work their way through these challenges in a disciplined way.

Deloitte points out that good governance will ensure trustees continue to serve their charities to the best of their ability, and that taking decisions through duly constituted board meetings is the safe way to proceed. The board must be aware of exactly what is happening within the charity – it is, after all, the trustees who are liable if things go wrong.

WORK THROUGH THE BOARD. Get together as a board whenever it is necessary. Generally, any trustee/director can convene a meeting and you only need to give reasonable notice. If you cannot achieve a quorum, meet on a subsequent date to ratify decisions. And, of course, with virtual meetings so much the norm in the current crisis, trustees can be virtually present.

As Deloitte further points out, majority rule prevails unless your constitution says otherwise. Board consensus resolves the issue and any dissenters must accept this. But trustees must provide evidence of robust debate – minutes are vital and are the first thing that regulators will look at.

Minutes do not need to be a verbatim account. While it is essential to clearly show decisions and actions, it is also vital you include the thought process. Set out the issue, the information on which the issue was assessed and the conclusion that was reached.

HAVE THE RIGHT INFORMATION. You must have the right information you require to take effective decisions. Arrive at a view that is reasonable – if you are reaching justifiable conclusions, you should not incur criticism.

YOU NEED TO HAVE A GRIP. A hands-off approach is not going to work in this situation, stresses Deloitte. Management needs more input and support, which trustees can give. They in turn need reassurance from management about how the charity is functioning.

REMAIN IN CONTROL. As a trustee, are you aware of the controls your charity has in place to manage new and emerging risks? Deloitte recommends the following questions for trustees to ask themselves: Are you confident about what management is doing? Is it easy to make mistakes? Can they go unnoticed? Is it easy to commit fraud? How are staff managing with remote working? Does it mean some people have greater systems access?

Where services have moved online, has guidance been given? How long are things taking? Are there safeguarding measures in place? Have policies been updated? If people’s roles have changed, is there training available?



HOW CHARITIES HAVE BEEN WORKING THROUGH CORONAVIRUS

Helping staff rise to the challenge

ROPINDER GILL, CEO of LYMPHOMA ACTION, writes: Lymphoma Action is the only charity in the UK dedicated to supporting people affected by lymphoma, a type of blood cancer. At the start of the Covid-19 pandemic, like many organisations we were constantly monitoring the daily changes coming into effect and what it meant for those we support and the implications for us as a charity. We had some robust emergency plans in place but the speed of the lockdown decision meant that we had to be very reactive.

We began immediately to experience an unprecedented demand for our services, with our helpline seeing three times the volume of enquiries and thousands of people visiting our website for the latest information around lymphoma and Covid-19. Blood cancer patients were identified very early on as being at extremely high risk of severe illness from Covid-19 and this, understandably, led to high anxiety and concern amongst our beneficiaries.

Our team were therefore stretched to the limit ensuring that we were providing the support we are known for and the level of trusted, up-to-the-minute information the situation demanded. All of this had to be managed at the same time as dealing with the reality of losing significant levels of income.

We realised early on that we would be required to make significant changes to ensure business continuity during an ever-changing situation. In an incredibly short period of time, we saw our whole team adapt to remote working, and some of our core services and fundraising activities move to an online format. We implemented new working practices and methods of service delivery in a matter of weeks - which we had been in early stage discussions about for some time. If anything, this crisis proves that necessity really is the mother of invention!

ROPINDER GILL of LYMPHOMA ACTION continues: Overall, as a team we actually work very well from home, but there are of course challenges for staff wellbeing when asked to work in a completely different way during a time of heightened global anxiety. For our senior management team, effective communication, understanding how staff feel and ensuring that they feel supported have been absolutely key in helping our charity respond to the crisis.

Allowing space for light relief and humour in staff communications, and admitting that the leadership team don’t always have all the answers have also helped the organisation bond together and work as one to solve problems, with some great shared ownership and innovation happening across the charity.

You cannot control everything, so by trusting your staff and giving people the freedom to make decisions and get on with things, it gives you the chance to focus on your strategy, your financial situation and your emergency response.

We all need support, including senior managers, and there are a lot of free external resources and webinars in the sector to help tackle competing priorities. I have personally gained huge value in reaching out to peers in other charities, if only to help in keeping grounded and realising that there are others in the same position and facing the same challenges.

ROPINDER GILL concludes: When working in “crisis mode”, it can feel uncomfortable to stop and think, but actually I have found it hugely important to make time to digest just what has happened over the past few months. Reflecting on things such as our business continuity, what we wished we’d had in place beforehand, the effectiveness of our internal and external communications, and how we have worked with our board all helped in building an understanding of our position and, importantly, how we can plan for the future.

Overall the biggest lesson that we have learnt throughout this time of uncertainty is the importance of staying true to the values of our charity. Our mission to support everyone affected by lymphoma is still the same and it is still just as valid – perhaps now more than ever. Although the crisis has impacted on a number of our activities, focusing on our purpose and reminding ourselves of why we exist help us to bring clarity to the challenges we are facing.

Financial implications for small charities

ANITA CHOUDHRIE, founder of STELLAR INTERNATIONAL ART FOUNDATION and also PATH TO SUCCESS, comments: The global health crisis has presented challenges for every aspect of daily life. Unfortunately, the charity sector has not been spared from negative impact. With the lockdown measures requiring the cancellation of in person gatherings, both of the charities I lead have been impeded from supporting the beneficiaries of their respective appeals.

Stellar International Art Foundation promotes diversity in the arts and provides support for artists. The closure of artistic institutions and restrictions on groups have imposed the challenge on our ability to host curatorial displays and events for the artists to promote their work.

Path to Success empowers and supports disabled female athletes across four major disability sports: para-badminton, para powerlifting, wheelchair tennis and wheelchair basketball, and provides funding for travel, tournament entry fees, physiotherapy and specialised equipment.

The postponement of the Paralympic Games to 2021 adds an additional year of training which comes with several expenses. We want to be at the forefront of supporting these Paralympians, but without celebrity ambassadors or corporations behind us, our fundraising activity and events are crucial. The inability to host them is an obstacle imposed by the coronavirus we are struggling to navigate.

Government support for frontline charities does not cover the small hardworking sport charities like Path to Success. We have already lost more than £50,000 with the cancellation of our annual indoor corporate wheelchair basketball tournament and we estimate that we only have a few months until we will have to halt operation. We are now depending largely on the generosity of individuals to help meet our £200,000 annual budget.

ANITA CHOUDHRIE of STELLAR INTERNATIONAL ART FOUNDATION and PATH TO SUCCESS continues: I would encourage all leaders of charities to use this time to reflect on your network and the community you have built with your causes, and to humbly ask for support in this time of need.

In relation to the para-sports charity, we have leveraged the power of technology by launching an online initiative on the shopping site easyfundraising and joining the nation in the 2.6 Challenge which supports female disabled athletes. We have also applied for grants and have thankfully been the recipient of Sports England’s Community Emergency Funding which will aid our immediate costs.

Along with virtual initiatives and grants, now is also a good time to review fund allocation. To support the athletes, we have redirected funding and given them the option on when they want to utilise their disbursements. We believe they know best, and this has allowed them to extend the use of our support to suit their new training plans as they aim to compete next year.

The best thing we can do as leaders of the charity sector is keep hoping and also appreciating our loyal donors, and be grateful for the health and safety of our loved ones, and spread awareness in solidarity of the troubles the sector is facing.

Right now, kindness matters

OA HACKET, founder of women’s cancer support charity LITTLE LIFTS, writes: Now more than ever, our littlelifts boxes are needed because women facing cancer treatment are clinically extremely vulnerable, and therefore at high risk from Covid-19. As well as the increased risk to health, the pandemic makes access to support systems and networks more challenging.

Chemotherapy can be gruelling both physically and mentally. During these difficult times, our boxes are making a huge difference to the lives of women, full as they are with gift items that help alleviate the side effects of breast cancer treatment.

Recipients tell us that the sense of solidarity and kindness they experience is equally valuable – and right now, kindness matters. Each box is carefully hand packed with support from our dedicated volunteers in the community.

OA HACKETT of LITTLELIFTS continues: The theme of solidarity is helping to carry us through the coronavirus outbreak because our charity community has been with us from the start. We have been open, honest and transparent with our supporters about the impact this pandemic is having on our work to support women with breast cancer. We also know that, right now, kindness really matters so we have offered virtual events which are both beneficial to our charity and the person taking part.

During these challenging times, more so than ever, it’s important to exercise empathy. It’s essential to tap into what people need right now, what is going to benefit them or add some value in some way to their life. In such an unprecedented situation, staying active is really important for mental as well as physical health, and so we wanted to help people stay as active as possible.

By taking part in our virtual marathons, people have not only helped to support those women having treatment during these uncertain times, but they have had fun and had a sense of community spirit.

OA HACKET concludes: Money is sparse so our emphasis has been on raising an amount of money that feels manageable, in the hope that we can encourage many people to fundraise small amounts. What surprised us was by setting out low expectations and asking for a small joining fee, and there being no pressure to raise additional funds, this meant we raised more than we had envisaged.

When we launched our first virtual marathon, not very many people had taken part in a virtual fundraiser. Giving people ideas to stay healthy, busy or get creative will all continue to be popular, especially if you can create a new twist on an old favourite. Creative things that haven’t been tried online before. We’re in the process of launching a couple of new initiatives that hope to do just this.

How charities have adapted due to Covid-19

HANNAH PAGE of the ASSOCIATION FOR CHARITABLE ORGANISATONS (ACO) observes: As the UK’s umbrella body for charities which give grants and wellbeing support to individuals, we are speaking every day to charities impacted by COVID-19 and hearing how it has affected their work.

These charities are managing an increased volume of applications for support with less financial resources, as traditional fundraising events have been cancelled and investment returns have diminished, and staffing has been reduced where employees are unwell or have been furloughed. Therefore, charities have had to quickly improve the efficiency of their procedures to still deliver urgent support.

Charities have also found the need to launch new services so they can continue to assist people while working remotely or to tackle new problems lockdown is causing for individuals.

We have been impressed to see how quickly our member charities have adapted to cope with these changes, and below we will share some of the ways charities have managed in these challenging times.

IMPROVING EFFICIENCY. Charities have made changes to their usual application procedures for support to cope with the influx of applications while still providing emergency support quickly.

Most have streamlined their application process, creating simpler and shorter application forms and requiring less evidence from applicants. Whereas before people may have needed to submit multiple pieces of evidence to prove they needed assistance, these are now limited to one or two items. Charities are now accepting proof of benefit entitlement as a main piece of evidence to show an individual needs their help, in order to process their application quickly.

HANNAH PAGE of the ASSOCIATION FOR CHARITABLE ORGANISATIONS continues: Other charities have introduced online applications for the first time and are discouraging postal and hand-written applications where possible to speed up the process while remote working. Some grant-makers have also introduced fixed amounts for emergency grants they will award, allowing them to get money to individuals quicker without having to determine how much to award for every individual application.

CREATING NEW SERVICES. Charities providing support to individuals have had to find new ways to help people remotely, where they would have once done so in person. New services have also been created specifically to tackle challenges lockdown has presented, from combatting loneliness to improving physical and mental wellbeing.

Charities with their own resources, or by partnering with other organisations, have started introducing a whole range of new services to help individuals through the pandemic. This has included online counselling and advice services on a variety of issues from redundancy support and maintaining healthy relationships in lockdown to sleep therapy, holding regular wellbeing webinars to introducing online chatbots and AI assistance to provide 24-hour mental health support.

GOVERNANCE CHANGES. Making quick decisions is paramount when helping people facing a crisis. However, decision makers not being able to meet face-to-face to approve applications for support has been a challenge faced by many charities. .

HANNAH PAGE concludes: Charities have made amendments to their constitutions to allow virtual meetings to make application decisions. Charities have also made changes to appoint staff to be able to make decisions on applications, rather than just trustees or committees, so decisions can be made quickly in between agreed meetings.

We are proud to see how charities have risen to the challenge and adapted quickly to this “new normal” we are all facing. We are now needed more than ever to help as many people as possible through this crisis.

Putting the emphasis on safety

OWEN SHARP, chief executive of Dogs Trust, says: All charities are feeling the pressure of the coronavirus crisis and we are no exception. The safety of our staff, volunteers, dogs and supporters continues to be the priority that has guided us through this pandemic.

We have taken significant steps to be agile and make changes to the way we work, as we have had to suspend many of our fundraising activities, and close our rehoming centres, charity shops, and Dog School training classes for the greater public good. We have adapted some of our existing services and taken them online wherever possible so we can continue to rehome dogs and help the nation’s dog owners in these uncertain times.

As wonderful as our centres are, it’s always the best thing for dogs to be in a loving home. We also needed to create space for the dogs in most urgent need of our care, so we have adapted our rehoming processes so we can continue finding forever homes for our rescue hounds, whilst adhering to social distancing measures.

Our rehoming centre teams have risen to this challenge with our new “handover at home” service conducting virtual matching with potential owners. Instead of asking them to come to our rehoming centres, we have been taking their new pet to them, and performing handovers at a distance.

We have just introduced a new appointments system which allows potential owners to spend time in the outdoor training areas of our rehoming centres, with dogs that would prefer to get to know their new family a bit better before going home.

OWEN SHARP of Dogs Trust continues: It has been key for us to work with the Government and other animal charities so we can understand how the ever-changing guidelines apply to our services, and ensure our approach is consistent. Also, we can learn from each other.

One of our greatest concerns is the long term impact this crisis may have on dog behaviour. To help prevent long term problems such as separation anxiety developing, and to help owners keep their dogs active and occupied in lockdown, we have released a series of training videos and advice through our digital channels.

Since we were unable to continue our Dog School classes in person, we have also been providing Dog School training classes online with our expert coaches for those people who signed up to one of the courses before lockdown.

This has also been a challenging period for our office-based teams, who have had to adjust to working remotely from home, which we weren’t doing much of before. Although this has been a significant change, we have been supporting them with new online video conferencing apps, online training and wellbeing resources.

OWEN SHARP concludes: It is vital that staff understand how the organisation is responding to this crisis and are up to date on how their working lives are likely to be affected as the situation evolves. We’ve trialled live broadcasts to get our messages out to as many people as we can and to give staff a chance to ask any burning questions.

While the long term impact of this emergency is yet to be felt, it’s likely animal rehoming centres will come under increased strain due to coronavirus in the coming months, at a time when charities are facing greater financial hardship. All charities will need to remain responsive to what lies ahead, and we will do everything we can to adapt so as to minimise the impact of this crisis on dog welfare, whilst continuing to support our dedicated staff, volunteers and supporters.

Adapting existing initiatives

IAN VALLANCE, director of fundraising at international children’s cleft charity SMILE TRAIN UK, says: During this difficult and uncertain time, initiatives which have the ability to spread smiles, spark conversation and/or encourage individuals to engage with their family, friends and neighbours, are a great way to offer hope and kindness - whilst also building a strong community for your charity.

At Smile Train we understand the power of a smile, so when the coronavirus pandemic hit we knew that it was more important than ever before to make sure that our supporters felt connected and uplifted, by continuing to engage with them through positive campaigns and initiatives.

We took this approach recently with our favourite annual fundraiser, the Big Smile Tea Party, which takes place every April. The Big Smile Tea Party has been running for several years and encourages people to come together over a cup of tea and some freshly baked goods, whilst raising awareness and funds for children with clefts globally. The initiative is always hugely popular with our supporters; however, due to quarantine measures this was not possible for 2020.

As meeting up with friends and family in-person was not an option for many, we quickly regrouped and considered how we could find a new way to continue with the initiative in this current climate. We knew that the pandemic had led to a surge in people turning online to stay connected with their loved ones, so we decided to take the same approach with the Big Smile Tea Party - by giving it a virtual twist.

IAN VALLANCE of SMILE TRAIN continues: In place of traditional tea parties, we decided to launch ‘The Big Virtual Cuppa’. This was a brilliant opportunity for those who could not be together, to grab their phones, laptops or tablets and have a catch up online - whilst raising knowledge (and donations if they wanted to) for Smile Train.

The fundraiser was a great success, with friends and families across the country taking part. We also received support from some famous faces, including Loose Women’s Nadia Sawalha and the UK’s favourite puppet duo, Sooty and Sweep.

Digitally adapting our event was a very new experience for us. However, following the incredible response that the “The Big Virtual Cuppa” produced, we will definitely be looking to incorporate more digital elements into our campaigns in the years to come.

IAN VALLANCE concludes: By considering our supporters’ needs and behaviours, we were able to look beyond the “norm” and come up with a creative solution that not only allowed us to give our supporters a reason to smile, but also helped to raise awareness of our mission – which is to provide 100%-free cleft surgery and comprehensive cleft care to children all over the world who are in need.

For other charities looking to cut through the noise during this difficult time, I would suggest looking for opportunities to adapt your existing initiatives – so that you can continue to share moments and smiles with your supporters during this unfamiliar time.

Pivoting from future provision to current needs

GORDON SEABRIGHT, CEO of the CREATIVE LAND TRUST, explains: Like every charity, we have faced unprecedented challenges due to the pandemic. In our case, we had to think carefully, creatively and quickly about how best to fulfil our mission when our original plans became (temporarily) impossible.

Creative Land Trust exists to provide more studio spaces for the artists and makers who are being priced out of London and our other cities. Places that thrive thanks to our creative industries are threatened with losing them, and our role is to reverse that loss and build ever more vibrant cultural communities, in London and across the UK. We had planned to spend this spring buying our first buildings, fitting them out and making them available for use by artists.

Because of the lockdown, artists found it impossible to work and to pay the rent for their current studios, and we faced the loss of much of the remaining workspace in London. So we redefined our mission, temporarily, to focus on saving the studios under threat rather than adding new ones. The Mayor of London set up a Culture at Risk fund, and Creative Land Trust took on the job of administering it for the art sector.

Within a week we had established a small team of employees furloughed by their regular employers, and on behalf of the Mayor of London we began to publicise a new Creative Workspace Resilience Fund. Two weeks later almost 160 workspace providers had applied for emergency funding, and within a month funds were released to begin protecting the city’s studios.

GORDON SEABRIGHT of the CREATIVE LAND TRUST continues: We learned two key things from this intense period of work. First, the importance of flexibility – emergency funding requires urgency in working practices, and the team were incredibly creative and committed in smashing through or working around the obstacles we encountered.

Second, there was the importance of a deep understanding of purpose. Our trustees and staff immediately grasped the need to pivot from future provision to current needs, and our funders and partners embraced the shift. Our work is intended to strengthen the arts at a time of massive challenges; but in carrying it out, we’ve broadened our ability to serve our beneficiaries and built a whole new set of relationships and friendships.

Hopefully we won’t face another pandemic for a very long time. But we will face challenges and crises, and it’s essential that we remember the lessons we’ve learned this spring, both around the way we work and our commitment to our charitable mission.


Charities facing huge funding gap

UK charities are facing a £10.1 billion funding gap over the next six months as a result of Covid-19, with incomes expected to drop by £6.7 billion at the same time as demand for their support rises by the equivalent of £3.4 billion, according to analysis from charity Pro Bono Economics (PBE).

Nine out of ten (88%) of those responding to a survey by PBE say they expect Covid-19 to reduce their income over the coming six months relative to pre-crisis plans, and well over half (59%) say they have had to “significantly” reduce their activity in response.

Many charities have sought additional funding, with half (50%) saying they’ve applied for emergency support from non-government sources and more than one in three (37%) applying for a share of the £900 million of support earmarked for the sector by the Government. But PBE points out that such sources are not available to all, noting that one in ten (12%) of charities say they “expect” to cease operating altogether before the start of December.

The anticipated income hit sits alongside a sharp increase in demand for the services of many charities. The PBE analysis shows that 72% expect demand to rise over the next six months in response to the crisis

To meet this surge in demand, PBE estimates that the sector would require an additional £3.4 billion of resource. The estimated £6.7 billion income hit is therefore generating an overall funding “gap” of some £10.1 billion, the charity says – resulting in unmet need for help across the country.

PBE says that small charities, with incomes of less than £500,000 a year, are especially exposed to the income squeeze. Its survey suggests that close to two in three (63%) organisations in this group have already reduced their activity in a significant way, approaching half (45%) say they’ve grown more pessimistic about their situation over the past week, and that 13% expect to go out of business within six months.

Matt Whittaker, chief executive of Pro Bono Economics, says: “The fact that one-in-ten charities expect to go under in the next six months is on its own a shocking enough statistic. But once we add in the significant constraints being faced by many of those organisations that do survive, we’re looking at a huge hit to the overall capacity of the sector – with implications for all of us.”

Cause for optimism about charitable giving

In the midst of the gloom about inadequate funding for charities a report based on the early part of the pandemic provides optimism concerning levels of individual donations. The report by fundraising services provider Woods Valldata shows that from the start of February to April 2020 compared to the same period in 2019 there has been a strong donation response as the crisis unfolded.

Compared to the same period last year, there was a 25% increase in actual vs. predicted responses to cash campaigns as emergency appeals land. The performance of like-for-like campaigns is stable year-on-year. Emergency appeals are outperforming forecasted expectations by 40%. There was a 286% increase in the percentage of online responses compared to the previous year.

There has been a 28% increase in the use of credit cards compared to the previous year. The only really negative sign was that regular giving cancellations saw a spike in February and March but are now stabilising. Charity inbound call donation volumes have seen a 45% increase against the expected average.

Based on these insights, Woods Valldata suggest charity fundraisers continue to fundraise using their normal campaign programmes, but include emergency appeals, and look for additional channels to complement campaigns - mixing digital and postal channels for example. The market is definitely receptive to charity asks at this time and Woods Valldata can see no reason from the data it has reviewed for charities to stop fundraising during the pandemic.

Dan Fluskey of the Institute of Fundraising says: “There are encouraging signs about the continued commitment of givers and the public’s response to emergency appeals even in the most difficult and challenging of times.”

Charities face extra strain from pension deficits

Increased pension deficits are putting additional financial strain on many charities already financially struggling in the midst of Covid-19, claims actuarial firm Hymans Robertson’s annual report on defined benefit pension funding in the charity sector. Three quarters of those surveyed had a deficit.

Alistair Russell Smith of Hymans Robertson says: “The Covid-19 pandemic has placed many charities under significant financial strain with fundraising and retail income particularly badly hit and with a need to conserve cash. In many cases there is additional concern as defined benefit pension deficits have also increased. On top of this, there is extra worry for pension schemes in the sector as forthcoming regulatory changes are putting pressure on charities to pay off pension deficits quicker.”

Says Russell Smith: “A delicate balancing act is needed between ensuring the sustainability of the charities and funding higher pension deficits. In the short term it may be wise for some charities to use recent regulatory easements to suspend pension contributions for three months to conserve cash. However, this isn’t a free lunch and longer term sustainable funding plans are needed for their DB schemes.

“The Pension Regulator’s new funding regime will introduce ‘fast track’ and ‘bespoke’ options for DB funding. The fast track option ensures no regulatory intervention if minimum standards are met but could mean too big an increase in deficit contributions for some charities.

“For charities which are asset rich but cash poor, the bespoke route may be a better option. This enables investment returns rather than cash contributions to close the funding gap but needs to be underpinned by charging some of the charity’s assets to the pension scheme.”

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