Charity Commission issues alert on military charities

The Charity Commission has issued an alert to charities that support veterans, after its review of a sample of military charities set up since 2007 revealed concerns around fundraising, financial controls and safeguarding

While the overall number of military charities has declined since 2007, the Commission noted an increase over that period in new applications to register charities to help veterans, particularly those injured in the military conflicts in Afghanistan and Iraq. Currently there are around 187 military charities on its register set up since 2007.

In 2016 the Commission identified that there were several reports in local and national media and on social media that raised issues about aggressive fundraising, low percentages of collected income received and the adequacy of safeguarding procedures in military charities.

It conducted desk based analysis on a random sample of 21 military charities and made compliance visits on five where the Commission found potentially serious concerns.

In its report, the Commission said it found a ‘concerning’ lack of safeguarding policies and practices in some of the charities reviewed, along with weaknesses in most of the charities’ oversight of fundraising, with some having no basic agreement in place with professional fundraisers, and some having no systems to ensure the charity receives all of the funds raised by professional fundraisers.

Some of those charities which engaged professional fundraisers could not clearly demonstrate how this was in the best interests of their charity; had not operated systems or controls to demonstrate sufficient monitoring which ensures the charity receives all of the funds raised by the fundraisers and people given permission to raise money on the charity’s behalf; and had not assessed or managed reputational risks associated with particular methods of fundraising being used.

In the case of a charity called Excalibur Unit, the Commission found the trustees had been approached proactively by a professional fundraiser, to raise funds on the charity’s behalf. They had failed to carry out due diligence, and the Commission established that the fundraising agreement allowed the fundraiser to retain 80% of funds raised for the charity through the sale of merchandise.

The Commission said that in many of the cases a lack of safeguarding policies or insufficient control over fundraising was an indicator of or linked to other problems. In a number of the charities there were insufficient controls in place over their finances, while a lack of financial planning was also a common factor.

Conflicts of interest which were not being effectively managed, and possible unauthorised benefits to trustees were a feature in one case, where the Commission is continuing to engage with the trustees.

The Commission was concerned to find most of the military charities did not have adequate policies in place to deal with complaints.

The regulator is now writing to veterans’ charities registered since 2007, to remind them to put robust safeguarding policies in place and ensure they are followed in practice, and to ensure they have proper arrangements in place with any professional fundraisers or commercial firms providing fundraising services.

Charity Commission military charities group case report is here.

Report by Pat Sweet

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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