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Community / Trust proposes Covid-19 contingency fund of up to £1.3 million

Value of investments now exceeds £410m as equity markets recover

Shetland Charitable Trust headquarters at Lerwick’s North Road. Photo: Shetland News

SHETLAND Charitable Trust is proposing to put a £1.3 million Covid-19 contingency fund in place to support organisations struggling to cope with the financial challenges presented by the pandemic.

Trustees will be asked at a meeting on Thursday to approve a substantial one-off increase in its budget to £12 million in 2021/22. A financial plan agreed in September 2019 had previously envisaged spending to be £10.26 million.

A total of £8.32 million – just over two thirds of the overall budget – will go on the main grant scheme, with the extra £1.3 million to be set aside to “provide a safety net, in the event of continued drop in trading income over 2021/22” for affected organisations.

The report, written by SCT chief executive Ann Black, states: “Throughout the assessment of grant applications for 2021/22, it became clear that because of Covid-19, organisations who are heavily dependent on trading income face significant ongoing financial uncertainty beyond the current financial year.”

As a result the £1.3 million will be made “if required” but will only be drawn upon “based on fully assessed and documented evidence of need”, Black’s report states.

In addition it is estimated that management fees paid to the companies tasked with investing SCT reserves on the money markets will rise sharply to £1.63 million compared to a budgeted £1.15 million in 2020/21.

Management and admin costs are expected to rise from £637,000 to £650,000 year on year.

The approval of individual sums to organisations, including the amenity, arts and recreational trusts and SCT’s contribution to the rural care home model, will be discussed in private by trustees.

Meanwhile, trustees will also hear that by the end of September this year SCT’s investments had mushroomed in value to £411.8 million – a return of some 38 per cent in the first six months of 2020/21.

The report noted that this gain was “driven by the recovery in world equity markets and should be considered together with the negative returns of the final quarter of 2019/20” when markets collapsed at the beginning of the Covid-19 pandemic.

The trust is also inviting bids from small community groups of up to £5,000 under a new-look funding stream opening on 1 December.

Focused on reducing inequality and social exclusion, the small grant scheme – subject to trustees’ approval at Thursday’s meeting – will see its budget swell from £30,000 to £100,000.

Trust chairman Dr Andrew Cooper said he hoped it would “strengthen and encourage the dedicated small groups out there which may be struggling to fund their services or perhaps see opportunities to extend their helping hand to more people in our community”.

It will provide up to 75 per cent of project costs and is open to constituted community groups with turnover lower than £50,000 a year in the fields of social care and welfare, arts and culture, heritage and the environment or sports and recreation.

The closing date for applications will be 26 January 2021 – with successful bidders expected to receive their grants in April. The scheme will run every year until at least 2025. Further details will be available on the trust’s website or by emailing grants@shetlandcharitabletrust.co.uk.