The government has announced £150m in additional emergency funding for charities and social enterprises.
The culture secretary Oliver Dowden also confirmed that the separate grant scheme for small charities in England, run by the National Lottery Community Fund, will open for applications on Friday.
The £150m fund will come from bringing forward the release of £71m from dormant bank accounts, as well as repurposing another £79m, Dowden said.
The funding will support work tackling youth unemployment, expand emergency loans for charities, and improve access to affordable credit for vulnerable people.
Youth Futures Foundation will get £10m to help organisations supporting unemployed and disadvantaged young people across the country to find jobs, and £45m will be deployed by Big Society Capital to make loans to charities and social enterprises as well as small businesses.
Fair4All Finance will receive £65m to support affordable credit providers, while a further £30m will go to the Access Foundation to support social enterprises which are helping vulnerable people.
Access said the £30m will be split between enabling existing emergency lending programmes to offer blended loan and grant projects rather than pure loans; and to help create new flexible forms of social investment and expand the range of financing tools available to the sector during the recovery.
Seb Elsworth, chief executive of Access, said: “This additional resource for blending is hugely welcome and cements the role of blended finance in the social investment landscape. It will help more organisations to be able to use investment in the short term.
“Crucially, looking ahead the sector will need a broader range of investment opportunities to help trade its way into the recovery. This boost of dormant account money will help make that happen and responds to the need which the sector has clearly articulated.”
Dowden said: “Charities and social enterprises are playing a vital role in our national effort against coronavirus.
“This funding will support organisations that are at the heart of their communities, building on our unprecedented package of financial support for the voluntary sector.
“Through our proposals to further expand the dormant assets scheme, we want to unlock hundreds of millions more pounds for good causes, while keeping customer protection at the heart of the programme.”
Small charity grants to open this week
Meanwhile, small charities will be able to apply for £200m in emergency grants from the Coronavirus Community Support Fund managed by the National Lottery Community Fund from this Friday.
The grants, which were originally announced on 8 April, will focus on charities working with communities disproportionately affected by the pandemic, the government said.
The rest of the money pledged to small charities in April will be set aside so that the government can assess “emerging priorities” for a future round of grants. It is hoped that the first frontline charities could receive funds within a few weeks.
The government and NLCF have faced substantial criticism for the delay in making the promised support available to small charities.
The Coronavirus Community Support Fund will open at 10am. NLCF said it would help charities increase support available to vulnerable people and reduce temporary closures of essential services.
Dawn Austwick, chief executive of NLCF, said: “In putting the programme together, we have been helped by insight and advice from across civil society. We will keep that conversation going to guide how we support charities and community organisations as they rebuild in the future.”
‘Social enterprises want to play a big role’
Peter Holbrook,chief executive of Social Enterprise UK said: “We welcome the announcement of £30m of additional dormant accounts funding for blended finance for social enterprises through the Access Foundation.
“Our members have told us that with the right blend, finance can play a role in getting them through this crisis and beyond into the recovery. That is why we worked with our partners in the sector to raise this issue with government and it is good to see the secretary of state responding with this additional investment.
“Social enterprises are mobilising communities right now to keep our country going through this crisis and want to play a big role in the national recovery. The more tools that government can give us now, the faster and better we can build our country back up and running.”
‘Concerned that there is no specific targeting or ring-fencing’
Peter Lewis, chief executive of the Chartered Institute of Fundraising, said: “We are glad to see this money is now starting to be allocated and more money being made available under the dormant asset scheme.
“Time now really is of the essence. Charities are still experiencing the collapse of fundraised and other income, and need this funding quickly to continue running vital services that so many depend on.
“We are concerned that there is no specific targeting or ringfencing of this funding to BAME communities, when the data shows they are being disproportionately affected by this crisis. We hope that the monitoring and evaluation systems put in place will demonstrate how it does reach the communities who need it most, helping them to respond to the emergency need.
“This funding presents the first opportunity to not only respond to the urgent need, but to begin to build a fairer and more equal society that will benefit us all.”