Blog: supporting staff and volunteers during the cost-of-living crisis
By Ann Breslin, Commission Policy and Research Manager
Did you know that, according to research*, most donations to charities are for around £20? This has been a stable figure since 2017 but the true value of that £20 is actually falling due to inflation and expected to be worth only £15.30 by 2024.
Of course, that won’t come as a surprise to most of us, who have already noticed the increasing cost of living in everything from food prices to energy bills. Quite simply, the money in your pocket isn’t buying as much is it used to.
As a result, many charities are seeing an increase in demand for their services at a time when their real income is falling, and the value of their funds and reserves are being impacted by inflation.
To gauge the impact of the cost-of-living crisis on organisations, NICVA recently surveyed all heads of Voluntary, Community and Social Enterprise (VCSE) sector member organisations in Northern Ireland**. The main concerns reported around the cost-of-living crisis were the increasing cost of fuel and energy (79.9%), wellbeing of staff/volunteers (66.5%) and the potential increase of staff wages (52.1%).
Faced with these difficulties, charity trustees are thinking outside the box to try to deliver services and keep their charity going through this crisis. Some are considering additional payments for staff and volunteers.
Trustees taking this type of decision need to ensure it is done correctly and doesn’t lead to problems down the line. This is not an option for every charity and trustees are trying to support staff and volunteers in other ways. For those trustees, looking at this option.
- Reward and benefits packages: In some charities staff in certain roles work extra hours above their contract and take time off in lieu. Trustees might want to consider the possibility of paying overtime rather than agreeing to time off to help both the staff member and the delivery of services.
- Increased flexibility: In many workplaces, including charities, staff may want to work from home to reduce travel costs. Some who have moved to hybrid working may want to go to the office more often so they can save on heating and electricity costs at home. Charity trustees should be as flexible as they can as often these types of initiatives will cost them far less than making additional payments or bonuses. If trustees are thinking of more flexible working arrangements, think about whether the charity can offer this to volunteers too, to help them manage their own costs.
- Cash flow/volunteer expenses: Trustees might consider other practical ways to alleviate cash flow concerns. For example, can the charity reduce the timeframe for reimbursing volunteer expenses so that the volunteer is not out of pocket too long. Or could the charity cover these expenses directly?
- Reduce need for travel: Use what we learned in the pandemic and do things online, where possible to save on fuel costs.
- Signpost to other sources of help: As much as you might want to, charity trustees will not be able to solve people’s financial concerns. So think about how you can signpost to other sources of support.
If you are considering making extra payments to staff and volunteers
Due to the cost-of living crisis, some charity trustees may be considering making extra payments to staff and/or volunteers, which they are not contractually or legally entitled to. Some charities are considering a one-off payment rather than a permanent pay rise to help staff with their increased cost of living.
If you are thinking about this in your charity, remember that as with any trustee decision, you must:
- act within your powers under your charity’s governing document and the law
- act in the best interests of the charity to carry out your charity’s purposes
- act with prudence to manage your charity’s resources responsibly and accountably.
- act with reasonable care and skill and take appropriate advice when necessary.
- manage any conflicts of interests.
If you do not have the power within your governing document to make a one-off payment to your staff or volunteers, then you may need to apply to the Commission for authorisation and much will depend on the motivation behind the payment.
For example, if trustees wish to make a one-off payment solely because they feel a moral sense of obligation to their staff to make a payment, then they must seek the authority of the Commission. Payments which are made out of charity funds and are motivated simply and solely by the belief of the trustees that the charity is under a moral obligation to make the payment are regarded as ex gratia payments and can only be made with the authorisation of the Charity Commission, under the supervision of the Attorney General.
Where charity trustees are unsure about the extent of their power or are concerned about the risks involved, they may wish to make an application to the Commission or seek independent legal advice.
These are challenging times and charity trustees are to be commended in their efforts to sustain their charity, serve their beneficiaries, and support their staff/volunteers. For the long-term health of the charity its vital that they continue to understand and comply with their duties to provide effective financial stewardship, and to ensure that any decisions are in the best interests of the charity and legally sound.
For more guidance, the Commission recommends trustees read our guidance on: Authorising Transactions and, for general guidance for charity trustees, see Running your charity.
* The cost of giving - What UK charities need to know about inflation (probonoeconomics.com)