Modelling considerations for membership bodies in the face of COVID-19

haysmacintyre, the award-winning chartered accountants and tax advisers, have been busy adapting their advice to provide charities and not-for-profit organisations with up-to-date support in these challenging and uncertain post-Covid times, where nothing is likely to be as it was before...

09 Apr 2020

Guest blog by haysmacintyre, an award-winning firm of chartered accountants and tax advisers, providing advice to entrepreneurs, fast-growing and owner-managed businesses, charities and not-for-profit organisations across the UK and internationally. haysmacintyre are one of our Platinum Sponsors of this year’s memcom 2020 conference, and are currently providing much needed advice and support to the membership sector.


COVID-19 has caused significant challenges to all businesses, and membership bodies are no exception. There has been a significant amount of work done across the sector over the last few weeks to move towards a remote method of working. This transition will help shore up a certain level of income, however, there are still significant unknowns as to what the actual impact on income for membership bodies will be.

These variables mean financial modelling is more important than ever: the ability to react to changes quickly and model their impact is vital during times of uncertainty. Although there will be some bodies who can ride out the impact with relative ease, there will be others who will face an existential crisis.

We would encourage thinking of ‘worst case scenarios’ to be able to see the extent of the risks and where key decisions must be made. Cash flow should be the immediate priority, and because the usual rules of business don’t currently apply, you need to consider how your cash flow may come under pressure. Membership bodies differ in many ways, from income streams to assets, so while there is no universal solution, some of the key considerations when planning for this are as follows:

Membership fees

probably the biggest unknown. How many members are not going to pay their subscription (at least in the short term)? This will be very difficult to predict and a range of outcomes will need to be thought through. This could be better or worse depending on the timing of your main subscription receipt period. Members may request deferrals, subscription holidays and it is also possible that more cases of hardship arise.

Member discontent

it is possible that you may get members requesting refunds because of a perception they are not receiving their full service provision, or the main event you host isn’t going ahead. In most of the constitutions we see, there is no requirement to repay subscriptions, however, there is a fine balance to maintain regarding member retention. It is advisable to consider whether you will offer something back to the membership through discounts, future subscription freezes, or other benefits. Any action should be carefully considered and modelled before decisions are made.

Event income

a considerable income stream for the sector is event income. There are significant unknowns as to how long the current lockdown situation will last and this needs to be factored into your modelling as a worst case basis. If you are a body who relies on an annual conference in September, you should plan for this not going ahead and understand the financial impact of that gap. It is possible to host virtual events but these are unlikely to deliver a similar amount of income.

Educational income

it is likely that many courses and exams will be postponed indefinitely or cancelled entirely. Again, given the uncertainty you should plan for a worst case scenario. Due to the dramatic consequences for the economy there could potentially be an impact on your student pipelines (eg if companies are taking on less staff) and this should be considered.


We are likely to face a downturn in the economy. Some bodies have commercial arrangements and sponsorships, will they continue? What might debts increase to, and how likely are these debts to go bad? This could have a substantial impact on cash flow.

Medium term

Don’t just think short term – business is unlikely to return to normal once the impact to the economy kicks in. Will your income be impacted into 2021?


We have heard some conflicting stories regarding insurance cover for business interruption. We would think it unlikely that organisations will be covered in full but this should be reviewed on a case by case basis. From a modelling point of view, you should not rely on full coverage. Even if you are covered later, payments are likely to be delayed and won’t help cash flow in the short term.

Cost upsides

The shutdown of facilities and move to online working will create cost savings. These should be fully considered and built into your modelling. It is also worth reviewing all costs and contracts and taking action to remove any unnecessary expenditure as a matter of urgency.

Capital spend

You should consider all planned capital and maintenance projects and evaluate the urgency of these projects in the current economic climate. On the flip side, does capital expenditure need to be spent to deliver more effective working from home provision?

Time to Pay

The Government has introduced measures to allow businesses more time to pay their PAYE and VAT bills. VAT will have some benefit in the sector, but it is worth considering obtaining a time to pay exemption from HMRC for PAYE.


There may be organisations who will potentially need an element of financing to see them through this period of uncertainty. In several cases, membership bodies will be an attractive prospect due to the security offered in the form of property. You should model the amount of funding necessary and approach your bank early. Those who have current finance should consider approaching their lender for repayment holidays as an additional cash boost. If you are a charity do not forget the requirements of S124 of the Charities Act.

Job Retention Scheme

The Government has introduced the concept of ’furlough‘. This is effectively pausing certain employees who may have limited or no work to do during the closure phase. The government will pay 80% of costs up to a maximum of £2,500 per month. Organisations should consider if some employees should be put on furlough in the short term and the impact this may have on the model. The legislation should be considered carefully prior to doing so.


haysmacintyre have created a dedicated COVID-19 web page to collate, analyse and provide insights on the various financial, tax and accounting measures and initiatives being announced – mainly from Governmental departments, but also from other relevant bodies and organisations. The web page will be updated regularly as further announcements and analysis are made.

If you wish to discuss this, or any of the other COVID-19 related initiatives, please email [email protected]