Third Sector Resilience Fund (TSRF): analysis of applications and wards

1. Introduction

As part of a range of measures announced by the Scottish Government in March 2020 to support third sector organisations (TSOs) and communities across Scotland, the Third Sector Resilience Fund (TSRF) was created to provide emergency funding to charities, voluntary organisations and social enterprises in Scotland which were struggling financially as a direct result of the Covid-19 pandemic and the subsequent lockdown.

Many TSOs were affected financially by the outbreak of Covid-19 in Scotland in early 2020, and the subsequent restrictions when the country went into lockdown on 23^rd March 2020. This was predominantly as a result of being unable to generate their usual levels of income because of the restrictions. A survey of Scottish charities commissioned by The Scottish Charity Regulator (OSCR) in early May showed that 75 per cent of charities reported having seen some impact on their finances.^[1]

51 per cent of charities responding to the OSCR survey reported losing fundraising income. This was reflected in the information provided by TSRF applicants, who described a range of ways in which their fundraising activities had been affected. For example, many reported loss of income as a result of the inability to undertake fundraising activities reliant on physical interactions such as coffee mornings or organised sports events. Others expected to lose fundraising income as a result of the cancellation or postponement of large sponsored events such as the Kilt Walk and the Edinburgh and London Marathons.

42 percent of charities responding to the OSCR survey reported loss of income through trading and other non-fundraising activities. Again, this was reflected in the TSRF applications, with many organisations ordinarily reliant on trading requesting support to replace the income lost as a result of needing to close up their shops, cafes, bars, tourist attractions, events venues and other sites of trading activity, many of which would not easily transfer online. Organisations also requested support because they had lost out on fees from members or service users. For example, many organisations ordinarily rely on regular payments from members for activities such as sports training, exercise classes, children's groups or educational activities. The lockdown restrictions meant that many of these organisations were not able to continue operating, and therefore lost substantial portions of their regular income.

The aim of the TSRF was to help TSOs through the initial crisis period by supporting them to pay rent, staff costs for workers who could not be put on the furlough scheme, and other essential overheads for a period of either four (phase 1) or three (phase 2) months. The intention was that by helping to pay for essential operating costs, TSRF funding would help many TSOs to remain in business in the short term, so that they could continue operating once the lockdown was lifted.

The fund was administered by three funding partners: Firstport, the Corra Foundation, and Social Investments Scotland. Firstport was responsible for managing the Scottish Government grant funding aspect of the fund, with both Firstport and the Corra Foundation distributing grants. Social Investment Scotland (SIS) were responsible for managing the loans.

The TSRF opened for applications on 25^th March and closed on 11^th September 2020. It consisted of two phases: phase 1 covered the period from 25^th March-22^nd April, and phase 2 covered the period 23^rd April-11^th September.

In phase 1, organisations could apply for a grant of up to £100,000 and/or a loan of between £25,000 and £250,000 to cover eligible costs for a period of four months. In phase 2, organisations could apply for a grant of up to £75,000 and/or a loan of between £25,000 and £250,000 to cover eligible costs for a period of three months. While an minimum grant of £5,000 was initially proposed, this was withdrawn in the first phase of the TSRF to support requests from smaller organisations which needed less than this to continue operating.

To be eligible to apply for the TSRF, organisations had to meet the following criteria:

• They must be a constituted group, charity, voluntary organisation or social enterprise based in Scotland and/or primarily delivering services/activities in Scottish communities
• They must have already been in operation before March 2020
• Their need for emergency funding must be directly as a result of the impact of COVID-19 and Scotland's national precautionary measures
• Their need for funding must be to help their short-term cash flow position
• They must be able to clearly articulate their costs and their funding requirements over the four month funding period (phase 1) or three month funding period (in phase 2)
• The organisation must be unable to cover their core costs for the next 12 weeks (phase 1) or four months (phase 2)

Any TSOs meeting the above criteria were eligible to apply for the fund and funding decisions were made on the basis of need as demonstrated in each application.

This report uses TSRF application and awards data to demonstrate the scale and scope of TSRF awards made to TSOs across Scotland to help the third sector through the financial disruption caused by the pandemic. The analysis includes breakdowns of awards made by local authority area, sector, SIMD, organisation size, and financial situation and resilience of both applicants and recipient organisations.

This report does not comment on the efficacy of the TSRF. A separate review of the effectiveness of the TSRF will be conducted in due course. Based primarily on monitoring reports provided by organisations at the end of the funding period, this future report will examine the effect the TSRF had on the recipient organisations.

Limitations

There are some limitations to this data which should be borne in mind when interpreting the figures. The main limitations are:

• SIMD and Local Authority data is based on the postcode given when an organisation applies for the TSRF. Many organisations operate over multiple sites or in a different location to their headquarters/offices, meaning that SIMD, LA and Vulnerability data presented here will not match precisely with where some organisations are working
• Some applicants submitted more than one application. This affects application approval rates and the financial data, which includes some duplication
• The financial data is variable in quality for several reasons. Organisations were asked slightly different questions about their financial position depending on the route by which they applied to the fund which reduces the comparability of the different data sets, and some organisations were unable to provide all the requested information. The financial picture for many organisations is also much more complex than can be ascertained from the relatively basic data requested via the application form. As a result, the data on financial resilience should be taken to be indicative rather than precise