Future funding has been announced for a programme that takes funds lying dormant in the accounts of inactive or ineffective charities and puts them to good use. The programme is managed by the Charity Commission and the charity UKCF, with funding from the Department of Digital, Culture, Media and Sport.

The programme has now secured funding by DCMS until March 2021 and will reach out to around 500 more inactive trusts in the year ahead, to help communities in need.

Funds are released from charities that are either inactive (meaning have had no income or expenditure over the last five years) or ineffective (spent less than 30% of total income over the last five years).

Once identified as dormant, the Commission gives the trustees an option to act – with support to help trustees get back up and running if needed. Otherwise the funds are redeployed to causes in line with the aims of the dormant charity or the trust is transferred to a local community foundation to be managed for the long term benefit of local communities.

The money is granted to charities in need, as well as used to create a regular income stream that will sustain their work to help communities for years. And the income from the investments is hitting the front line already, with many charities depending on this to help them support essential causes through the pandemic.

The programme, which began in January 2018, has so far contacted over 1,800 charities. In many cases the programme has helped them get back on track, but when trustees have failed to respond, the Commission has intervened to wind up the charity and remove it from the register.

The Commission has so far removed 179 charities from the register – 67 since lockdown – transferring funds to similar charities, to local Community Foundations or to UK Community Foundations, and revitalised 26 charities.

Baroness Stowell, Chair of the Charity Commission, said: “There is nothing worse than money donated for a good cause not being put to good use. So I am delighted that we have helped to release over £300,000 of dormant charitable funds in the West Midlands. The charities, which for some time were inactive or ineffective, that have come forward willingly to assist with this important programme have done a great public service and we are hugely grateful to them. But this shared effort to revitalise charitable funds and deliver the donors’ intended benefit to society has the potential to go even further – and it’s needed now more than ever.

“The Charity Commission is calling on trustees of charities that have funds and are inactive or unable to make the difference they once did or had hoped to achieve, to come forward now so that the charity money they hold doesn’t sit idle, but can be put to good use by other charities with similar causes supporting people and communities at this time of heightened need.”

Rosemary Macdonald, CEO of UK Community Foundations, said: “UKCF and community foundations are uniquely placed to offer this exciting programme. Community foundations are embedded in their communities and have years of experience working with local trust funds and philanthropists. Community foundations are helping to modernise old trusts and get them back into action – all at a time when our voluntary sector desperately needs financial support to get through this difficult crisis.”

Minister for Civil Society, Baroness Barran said: “The efforts of charities and their volunteers will continue to be crucial as they have been throughout coronavirus to date.