Comic Relief recorded a deficit of about £27m last year as it accelerated its grant-giving during the pandemic.
The grant-maker’s latest accounts, for the year to the end of July 2020, show total income at the poverty relief charity fell by £8m compared with the previous year, to £78m.
This was largely because 2020 featured its biennial Sport Relief campaign, rather than Red Nose Day, which takes place in the odd-numbered years and historically attracts more revenue, the charity said.
Sport Relief raised nearly £41m through a live show with an audience before the first national lockdown restrictions were announced in late March last year.
At the same time, total expenditure increased from £98m to £105m, leaving the charity with a deficit of about £27m.
But the charity still had £95m in reserves at the end of the year, down from £132m 12 months earlier.
Income from the charity’s trading subsidiaries more than halved to £5m.
The financial impact of the pandemic meant Comic Relief began a restructure that resulted in 42 people leaving in the summer at a cost of £662,000 in redundancies, the accounts indicate.
In July last year the charity estimated it would need to make a quarter of its staff redundant.
But the total number of staff up to that point increased by 20 to 243, costing a total of £14.5m.
The charity hopes to reduce costs by £3.2m over the next two financial years and find additional savings by reducing its office space.
Despite the restructure, the charity said its deficit increase was not a concern as it was mostly the result of increased grant-giving during the pandemic.
Comic Relief spent more than £46m on charitable activity in the UK in 2019/20 compared with £32m in the previous year.
This includes nearly £3m awarded to 10 organisations led by people from a range of ethnicities to support hundreds of small projects across the UK offering key services to communities with the greatest risk of Covid-19.
The two biggest areas funded in the UK and globally were mental health and gender justice, including domestic abuse.
Successful partnerships for Sport Relief and the Big Night In meant public donations nearly doubled, with every £1 donated by the public rising to £1.79 through Gift Aid, partnerships and match-funding.
But the charity’s investment portfolio plunged from a £13.2m surplus in 2019 to a loss of more than £9m last year.
Alex Botha, chief operating officer at Comic Relief, said the charity sold about 75 per cent of its liquid portfolio to help protect it during the pandemic and from the subsequent stock market crash.
Botha said the charity’s remaining investments were all ethical and the grant-maker plans to reinvest as stock markets recovered from the pandemic.
The charity’s 2018/19 accounts revealed that its board had banned investments in fossil fuels as part of a new ethical investment policy.
Comic Relief was criticised in 2013 for investing in companies selling products including alcohol, tobacco and arms.
Botha told Third Sector: “Grant-giving has accelerated during the pandemic, which we felt it was the right thing to do at this time.
“It’s a challenging time for the sector, which is going to get worse in my opinion. So there’s an element of needing to be both reactive and proactive when it comes to our operating model.”
Samir Patel, the charity’s new chief executive, will take up his role next month.