Many charities are "teetering on a cliff edge" at the very time they are needed to help cope with the coronavirus crisis, a senior church leader has warned.
The Bishop of St Albans, Rt Rev Alan Smith, stressed the need for urgent assistance as the House of Lords debated online the challenges faced by the charitable and voluntary sector during the current Covid-19 pandemic.
While the outbreak had led to an increase in demand for support services, it coincided with groups seeing a significant cut to their income with the closure of charity shops and cancellation of fundraising events because of the lockdown, peers heard.
The National Council for Voluntary Organisations has estimated that the sector overall may lose around £4 billion over a 12-week period as a result of the pandemic.
It has warned that this would result in charities becoming unable to provide essential services at a time of increased need.
Speaking during the debate, the bishop said: "At the very time when we need every charity in the country to be mobilised and deployed, many charities are teetering on a cliff edge."
"Over the years, as the Government has rightly raised standards in safeguarding and heath and safety and training, charities have had to employ people to meet those requirements.
"And now, as fundraising activities and charity shops income has dried up, they are furloughing the very staff who are needed to oversee volunteers.
"Many charities are themselves major employers and as such are part of the drivers of economic recovery."
He added: "We are all passionate about trying to allow charities to function fully again and to raise funds, but, meanwhile, they need help and they need it rapidly."
Opening the debate, Liberal Democrat peer Lord Addington said the £750 million package of support for charities announced by Chancellor Rishi Sunak was welcome, but pointed out that this was far outstripped by the losses faced by the sector.
"We have got to have a look at how these charitable institutions survive to meet the needs that will still be there at the end of this period."
He added: "The longer the lockdown goes on, the worse this situation is going to get."
Labour peer Baroness Pitkeathley, president of the National Council for Voluntary Organisations (NCVO), said the communities served by charities such as the poor, sick and disadvantaged are "more in need than they have ever been as a result of Covid-19".
While acknowledging the Government's financial support, she said: "It is nowhere near enough to reflect the money that charities have lost.
"For years charities have been urged to diversify their income streams to find new ways of financing their work, but now those very ways - their shops, their social enterprises, their partnerships with businesses - are all under threat."
Labour's Baroness Wilcox of Newport said charities have already been "cut to the very bone" during 10 years of austerity and are now having to spend vast sums of money on personal protective equipment (PPE).
"More support must be leveraged into the charity sector to prevent it being decimated," she said.