The reputational risks arising from the misapplication of charity funding have been highlighted in a substantial libel claim against the Daily Mail.
The newspaper alleged a UK-based charity, which provides relief and development aid to Palestinians, had supported a 'hate festival'. The charity was one of many donors to an event in Gaza but knew nothing of the controversial content in a play that was staged at the event, and it had not funded or supported it. The Trustees unequivocally condemned the play but the Daily Mail nonetheless published two articles alleging that they had supported it.
In the second article the newspaper also made false claims associating the charity with terrorism. This was on the basis of a designation made 16 years ago in the US, of which no evidence had been supplied and which was wholly disputed by the charity and its trustees.
The Trustees received a significantly high damages payment of £120,000 from the publishers of the Mail and Mail Online and an apology.
There are several important points for all charity Trustees to take away from this case:
- The need for due diligence on how charity funds are to be applied by beneficiaries is important as any negative aspects can rebound against the charity. But even with the best investigations, sometimes the unexpected can happen and the charity can find itself facing claims it has supported an activity or event of which it had no knowledge.
- This could give rise to a defamatory allegation against the Trustees personally and the charity. If such a claim is threatened by a newspaper or broadcaster, take action to challenge the lawfulness of any such article before it appears – prevention is better than cure.
- It is easy to underestimate the impact that a historic negative report can have on the charity's current reputation. A critical document from 16 years ago may be thought irrelevant, but once a charity is in the media spotlight, any previous adverse material will resurface. Therefore, untruthful or inaccurate and misleading material in the public domain should not be left unchallenged.
- In this instance, the more recent satisfactory investigations by the Charity Commission were useful material to exonerate the historic unreliable allegations. A charity's reputation needs to be underpinned by sound governance and for charities not to be afraid to meet false claims with a challenge.
For further information on any aspect of charities and reputational risk, please contact Jo Sanders, Partner, UK Head Media and Reputation.
