In an official report published on 25 March 2021, the Charity Commission says the former trustees of Afghan Heroes failed to take reasonable care in managing the charity and its finances, and gained significant unauthorised private benefit from it.
The report also criticises the charity’s fundraising, and the quality of the services it offered to veterans with complex needs.
From a wider learning perspective the commission reminds us that partnering with a specialist individual or business to raise money for a charity can bring benefits. However, to meet their legal duties, trustees must ensure that:
- These arrangements comply with the specific legal requirements that apply
- They can show that the arrangements, including the costs, are set and monitored in the best interests of the charity, protecting it from undue risks to its reputation and other assets
- Money raised is always used in an effective and efficient way to advance the objects of the charity and support beneficiaries
Charity trustees should ensure that they have a conflicts of interest policy in place to ensure that they are fully aware of their responsibilities and that any conflicts that do arise are appropriately managed.
The charity commission published a conflicts of interest: a guide for charity trustees (CC29) in May 2014. It includes a checklist to enable a trustee to manage any conflict appropriately.
The conflict of interest guidance can be accessed here.
The Charity Commission also states that trustees cannot receive any benefit from their charity in return for any service they provide to it or enter into any self-dealing transactions unless they have the legal authority to do so.
The authority would be described in the charity’s governing document or, if there is no such provision in the governing document, the Commission or the Courts.
The charity commission published its Trustee expenses and payments (CC11) guidance on 1 March 2012, where it explains that a charity trustee may only be paid for serving as a trustee where it is clearly in the interests of the charity, and provides a significant and clear advantage over all other option.
The trustee expenses and payment guidance can be accessed here.
Details of the inquiry, including the wider learning can be accessed here.
Local charities may wish to review their procedures regarding managing conflict of interest and trustee expenses/payments in light of this inquiry’s findings.