The Charity Commission has published its case report into the Presidents Club Charitable Trust. This concludes an investigation into its fundraising practices as reported in the media earlier in the year, on which you can find our previous guidance to charities here.
The report supplies a number of lessons for all charities, particularly those who engage third parties to put on fundraising events. The investigation was carried out in partnership with the Fundraising Regulator & The Equality and Human Rights Commission and is also notable for making Explicit reference to provisions of the Charity Governance Code & Code of Fundraising Practice in its regulatory findings.
The key findings in the report touch on a range of issues and trustees may wish to read the report in full alongside the guidance referred to. The key points made by the Commission cover the following areas:
The Charity Commission found a number of faults in the Trustees decision-making. In particular their decision-making was found to be inadequately informed, not being ‘informed by the Code of Fundraising Practice, which they did not know about, or the Commission’s guidance, particularly on the essential trustee duties and on decision making.’ Where the trustees had conducted reviews of previous events this was also undermined by the fact that discussions had not been documented. This was highlighted as a ‘clear breach’ of the Commission’s CC3 guidance and illustrates how trustee discussions can be worth little as evidence of decision-making where they are not properly and promptly recorded.
The reporting of alleged misconduct at the Presidents Club dinner in January preceded a renewed regulatory focus on safeguarding as a number of charities were scrutinised for their historical practices. The case report touches on the Charity Commission’s approach to the issue, noting that Trustees ‘must take reasonable steps to ensure that beneficiaries or others who come into contact with their charity do not, as a result, come to harm.’ The report concludes that this ‘should be a key governance priority’ given that Public trust and confidence in the charity (and the wider sector) can be harmed if trustees do not act appropriately.
In its report The Charity Commission identifies a perennial concern of trustees failing to properly engage with and monitor charity fundraising practices. In the case of the Presidents Club Charitable Trust it found that failed to ensure ‘they were up to date with their legal duties’ and the Code of Fundraising Practice in their hosting and failing to properly monitor the mens-only fundraising dinner which sparked the investigation. In particular charities should note the Charity Commission’s finding that ‘although a standard service provision contract was entered into with the main event organiser, no bespoke written contract was in place for the Agency supplying event staff.' Nor was there any detailed written instructions or specifications from trustees to either of their suppliers. These should have been in place.
Reputation / risk
The reporting into the ‘Presidents Club scandal’ has had huge repercussions for the reputation of the charity, and has led some beneficiaries of its funds to consider returning donations. The Charity Commission found the trustees’ failure to fundamentally address the risk to the reputation of the charity from the event was a failure to comply with the ‘legal duty to manage charity resources responsibly, specifically avoiding exposing the charity’s assets, beneficiaries or reputation to undue risk.’ The fact the event had been held regularly for many years was no mitigation; the trustees should have recognised earlier that in ‘today’s world’ that a men-only dinner of this kind exposed the Charity to undue risk.
The Institute of Fundraising has also published guidance in time with this case report on safeguarding for fundraisers which is a helpful toolkit for charities considering their practices. We recommend charities who fundraise review this guidance and take the following steps:
Ensure your trustees are up to date with their legal duties in relation to fundraising, particularly for any charities who ‘run a significant fundraising event with high profile attendees likely to attract social or media interest’ such as a gala.
Follow the Commission’s recommendations in its case report and specifically ‘ensure that the policies and contractual arrangements in place reference and reflect the requirements and best practice set out in the Code of Fundraising Practice and monitor those third-parties who are fundraising on their behalf.’
Review and assess the risks to your charity’s reputation posed by its fundraising practices in light of modern standards in order to properly manage them.