The Charity Commission is the body that regulates and registers charities to try and ensure that the public can support charities with confidence.
The Commission published a report issued before Christmas 2016 into the activities of Hospice Aid UK following concerns from the public and other charities about the way the charity raised funds.
The report concluded that the trustees had breached their duties and had not acted in the charity's best interests by entering into onerous fund raising agreements.
This report reminds us of a growing number of charities coming under increasing scrutiny in relation to aggressive or unacceptable fund raising practices.
While everyone would recognise the squeeze on charity fund raising in a difficult market, charity trustees and employees must always keep in mind the objects of the charity and how to fund raise ethically.
Some of the facts from the report about Hospice Aid UK however are striking. For example, from April 2008 to March 2012, the charity only gave 15.6% of its gross income to hospices by way of grants. In 2011, 84.4% of the donations from the public were spend on the administrative costs of the charity.
To try and address the funding crisis, the charity trustees entered into an agreement with a company that carried out direct marketing.
The Commission reported that there was no evidence that the charity trustees had given proper consideration to the risk and potential liabilities arising from the agreement. They had failed to consider alternatives and had breached the law in that the agreement did not comply with appropriate legal requirements.
This report is a reminder of the importance of ensuring that charities are properly set up and advised. Many people feel that they want to 'give something back' and become trustees. However, the personal risks and potential damage to the reputation of the charity if well-meaning decisions are taken without proper due diligence and advice must be kept in mind.
To discuss this or any other charity related issue, contact us.