A major funder has announced that it is offering an additional £2.5m overall to its more than 700 grant holders to cover the increase in employer national insurance contributions (NICs).
The Henry Smith Charity told Civil Society that it will give its grant holders, most of whom receive funding for three years, a one-off payment later this year covering the remainder of their current grant.
In a recent LinkedIn post announcing the funding, the charity said: “We know that financial changes like this can have a real impact on the organisations we fund, especially in today’s challenging socioeconomic environment.
“That’s why we’re committed to making sure our grant holders aren’t left to absorb these extra costs alone.
“This adjustment reflects our ongoing commitment to fair, flexible funding, and our belief in building strong, sustainable partnerships with those creating positive change on the ground.”
The government’s NICs rise, announced in chancellor Rachel Reeves’ first budget last October, came into force this week and has been estimated to cost charities £1.4bn a year.
‘Generous offer of support’
The charity’s social media post quotes three of its grant holders that have been offered the funding uplift.
Alan Davidson, co-founder of Bridge Community Project in West Lothian, Scotland, said: “This is a very generous offer of support.
“We have been concerned about how this will impact our organisation as it does cost us more per year. The money will be very helpful to help mitigate these difficult changes.”
Connor James, chief executive of Age Cymru West Glamorgan, said: “We are truly grateful for your proactive and thoughtful response and for continuing to stand by organisations like ours through increasingly difficult times. Your support genuinely makes a difference.”
Amber Wilson, business development manager of Basis Yorkshire, said: “The impact is beyond financial; it’s a boost to morale as well for all staff to know funders are engaged with the challenges experienced.”
Other funders urged to follow suit
Umbrella body NCVO encouraged other grantmakers to offer similar uplifts to the charities they fund.
“It’s commendable that the Henry Smith Charity is recognising the significant impact the rise in employer national insurance costs will have on the organisations it funds,” said NCVO’s executive director Saskia Konynenburg.
“This is just one of many financial pressures voluntary organisations are facing this year, at a time when charitable services have never been more needed.
“Charities are often criticised for staff expenditure, but they simply can’t operate without skilled and dedicated workforces. It’s these valued colleagues who go above and beyond to deliver vital services.
“At NCVO, we hope other funders take inspiration from the Henry Smith Charity, and divert funding to address some of the complexities of operating in an environment marked by rising costs, increasing pressure, and greater demand.”
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