If your charity experiences major fraud or another serious problem, the Charity Commission has statutory powers and obligations to take action.

I confess that I am shocked to say I am currently working with no fewer than three charities, who have reported serious problems to the Charity Commission, and requested regulatory actions from the Commission, and are receiving no response at all.

The powers of the Charity Commission

In theory, the Charity Commission has ample statutory authority to deal with dishonest and abusive charity trustees, appoint and dismiss charity trustees, establish ‘Schemes’ for charities with problem constitutions, transfer charity property, and trace and recover charity funds.

Three charities receiving no response

In practice, I am currently helping:

• A charity which reported fraudulent trustees making off with what is now £90,000 of charity funds, that has received no response from the Charity Commission for more than three months.
• A charity requiring a Scheme and the appointment of new trustees, that has been awaiting a response from the Charity Commission for more than two months.
• An unregistered charity which reported dishonest trustees, who have failed to account for over £350,000 of charity funds, that has heard nothing from the Charity Commission for more than a month.

An ongoing problem at the Charity Commission

As you would expect of a regulator, the Charity Commission has plenty of power to its elbow.

Unfortunately, as long ago as 2013 the National Audit Office found that the Charity Commission:

• was reactive rather than proactive
• was slow to act when investigating regulatory concerns
• did not do enough to identify and tackle abuse of charitable status
• made little use of its enforcement powers
• failed to take tough action in some of the most serious cases

Although there have been improvements,  the Charity Commission is still reeling from a cut of 40% of its pre-2013 government funding, with no commensurate reduction in its caseload.

Self-Help

So, if you find you charity facing a serious problem, self-help is likely to play a critical role.  My advice is:

1. You MUST report any “serious incident” to the Charity Commission immediately it arises.
2. Think seriously about taking legal advice from a practising solicitor who knows the territory.
3. Understand that the Charity Commission is NOT a prosecuting authority; waste no time, report any criminal activity to the police immediately.
4. You should abandon any thought of speedy court proceedings to resolve your charity’s internal issues. These will almost certainly constitute “charity proceedings” which require permission from the Charity Commission which, as things stand, will be a long time coming.
5. If you do refer your case to the Charity Commission, for what it is worth, use the Charity Commission contact line to chase progress. The phone number is tucked away within this page, or I can tell you it is 0300 066 9197, 10am to 12 noon and 1pm to 3pm Mondays to Fridays.  But allow a lot of time – the call queue is often over 20mins. My experience suggests that the very obliging staff will in all probability apologise profusely that they can give you no indication whatsoever as to when your case will be actioned.
6. If nothing happens and if it will make you feel better, complain about the Charity Commission but don’t hold your breath.
7. If your remedy lies only with the Charity Commission and, having already complained you are getting nowhere, think about the Parliamentary and NHS Ombudsman and involving your MP and maybe your local media – but remember your duties as a charity trustee include the protection of your charity’s reputation.

I’ll be happy to help

All this is not for the faint-hearted nor for the uninitiated.

Charity disputes, dishonest and fraudulent behaviour in charities, compliance issues and dealing with the Charity Commission are all within my compass.  If needs be, I can also help you find and instruct a suitably specialised solicitor.

Why not contact me for an initial free consultation?

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Geoffrey Hand

Geoffrey Hand is a charity governance consultant, offering governance consultancy and training. He also provides legal services management, helping charities get better value for money from their lawyers. Geoffrey has extensive experience in the charity and legal worlds, and his mission is to help charities deliver good governance.

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