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Charity Commission Inquiries of Interest

on Friday, 18 February 2022.

The Charity Commission's reports on the results of inquiries it has conducted provide invaluable insights into regulatory pitfalls.

Here, we take a look at some of its key recent inquiries.

Mahfouz Foundation

The Commission has opened an inquiry into the charity following media reports highlighting donations made to the charity which were meant for another charity. The inquiry will consider whether the donors intended to send the money to the charity and if so, make sure the funds are being applied for the charity's purposes.

Avicenna Global

The inquiry involved the charity's connection with Avicenna Academy School and found that the trustees' decision to  transfer the school to a private partnership did not result in a financial loss for the charity. However, payments made to family members for their work at the school were in breach of the governing document, resulting in unauthorised trustee benefit. The Commission ordered the trustees to wind up the charity and the charity was removed from the register on 3 September 2021.

Manor Building Preservation Trust Limited

The inquiry found evidence of the charity's funds being used for the personal benefit of the trustees living at Goldington Hall, as opposed to furthering the charity's purpose for the public benefit. The funds were used towards expensive cars, travel, entertainment and land. The excessive spending and mismanagement by the trustees led to the charity being removed from the register and Companies House on 5 January 2021. Goldington Hall and the charity's remaining funds were transferred to the Landmark Trust which operates for a similar purpose.

Human Appeal

The inquiry delved into the charity's late filing of serious incident reports, instances of cash-couriering and its due diligence processes in respect of a significant donation received from an overseas donor and the charity's relationship with a supplier in Syria. Where the nature of a charity's work involves operating in high-risk jurisdictions and dealing with large amounts of money, the Commission expects a high level of control and monitoring to be in place. The Commission concluded its inquiry on 25 October 2021 and reported that the charity is in a stronger position due to the current trustees' positive engagement throughout the inquiry.

Alauddin Siddiqui Trust

The inquiry was closed on 20 October 2021 and concluded that the trustees have acted upon the Commission's guidance to improve its administration and governance. The supposed merger of the charity with a limited company was resolved by the dissolution of the company and the funds transferred to the charity's bank account. The trustees also successfully negotiated a property settlement to recover a large sum of money. The Commission issued the trustees with an action plan to revisit the charity's objects in light of its humanitarian relief work.

The Alternative Animal Sanctuary

The Commission opened a statutory inquiry on 2 March 2017. It was concluded that due to the charity's failure to manage its finances properly which resulted in a significant loss, the charity should be wound up and two of the directors disqualified. Over £400,000 of the charity's funds have been redistributed to other charities with a similar purpose on animal welfare. The Commission stressed the importance of ensuring that charities' finances are properly recorded and transparent.

The Runnymede Trust

The Commission concluded its compliance case on the trust on 17 August 2021, confirming that the trustees did not breach their legal duties and responsibilities when they made the decision to work with the Good Law Project. A charity can work with politicians where it furthers its charitable purpose as long as its engagement with political parties remains neutral, to prevent any risk to the reputation and independence of the charity.

If you need advice please contact Shivaji Shiva on 07788 313298 or your usual contact in the Charity Law team, or complete the form below.

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