Shetland Charitable Trust will provide a £1.3 million “safety net” for organisations facing financial uncertainty due to the pandemic.
Trustees approved the contingency fund at a meeting on Thursday.
The impact of Covid had become clear to the trust while assessing grant applications for 2021/22, according to a report prepared for the meeting, with organisations heavily dependent on trading income facing significant ongoing financial uncertainty beyond the current financial year.
The fund will be available in case Shetland Recreational Trust, Shetland Amenity Trust and Shetland Arts suffer a repeat of the financial hardship endured this year as a result of a drastic drop in trade and visitors.
A similar arrangement is being offered to social enterprise company COPE, which operates retail outlets where sales have been hit.
The trust recommended this contingency fund “to provide a safety net” for these organisations in the event of a continued drop in trading income over 2021/22, which will see £1.3 million set aside for additional grant assistance if required.
Chief executive Ann Black said: “This will be for one year only.”
Trustees approved increasing its budget to £12 million from £10.26 million, to fund the contingency grant scheme and boost its main grant scheme to £8.32 million.
Ms Black told the meeting the “main purpose” for the budget increase was to “provide additional funds to mitigate the impact of Covid-19”.
Chairman Andrew Cooper said the “strong position of our investments” meant the trust felt “we can comfortably do this”, with investments rising to £411.8 million over the last six months.
Mr Cooper said the trust would “wait to see evidence of need before we disperse the money”.
“We will see how they get on as the year goes by,” he added.
Ms Black said the main grant scheme would be allocated “as normal”.
“This will be very much in evidence of need,” she said, with funds released if organisations realised the drop in trading income they were projecting.