Coronavirus: Bulletin

Charities face cash flow crisis over coronavirus

18 Mar 2020


The financial impact on charitable organisations in Jersey due to the spread of coronavirus could run in to the millions a local survey has revealed. The severity of the impact on organisations’ cash flow is such that it will affect their ability to deliver services upon which many islanders depend.

A survey conducted by the Jersey Community Partnership has found that two charitable organisations have already forecast a loss of over £200,000 since the coronavirus reached Jersey, and most respondents said the impact on their cash flow is “severe”. The cancellation of events that generate valuable unrestricted funds as well as having to cancel revenue-generating activities (such as training) were cited as the biggest factors impacting on cash flow.

Reducing costs, applying for emergency grant funding and halting services were the activities most organisations will focus on in an effort to improve their financial position.

Rachel French, CEO of the Jersey Community Partnership commented: “These are incredibly challenging times for the voluntary and community sector, and particularly for those who are supporting the most vulnerable in our community. This is in many respects a perfect storm for these vital institutions; an increase in demand for their service; the need to plan for a reduction in their volunteer and staff numbers, and a devastating impact on financial resources in a short space of time due to cancellation of fundraising events or slowdown in donor activity.

With over 500 charitable organisations operating in Jersey, the financial impact of coronavirus is likely to run in to the millions before too long. The Charity Commissioner recently made a keynote speech at the Jersey Charity Conference and observed that the majority of charities he has reviewed have cash reserves that will last a matter of months under normal circumstances. Jersey does have reserves available through legacy and lottery funds for example, and JCP are working hard to try to coordinate a financial aid package for the sector which includes ensuring that the business benefits already announced by the Ministers are available to charitable entities. We also want to ensure that the Government include charities in any economic stimulus packages and that tax reclaims on donations and GST reclaims are processed as expeditiously as possible. Charities are not typically able to take advantage of bank-originated emergency funding loans, but we are exploring whether government may be able to offer interest-free loans to cover shortfalls in income. We are also calling on our existing grant-making organisations to review their emergency funding policies and programmes to make funding more open and accessible. If cash flow is the greatest threat to the existence of some of our organisations then we need to see what funding could be made available in the short term to cover this shortfall. Whilst our charitable sector in Jersey is focussed on meeting the needs of their beneficiaries the Jersey Community Partnership is doing what we can to ensure the sector is supported.”


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