Military charity wound up over regulatory concerns

The Charity Commission has ordered a military charity to wind up after an investigation report highlighted serious regulatory concerns over ‘wholly offensive and inappropriate’ materials and comments, as well as governance failings relating to fundraising

The regulator’s inquiry into 1st Knight Military Charity opened in November 2016 in response to a BBC Scotland programme which exposed anti-Islamic comments made at the charity’s shop by a trustee and volunteer, as well as the sale of merchandise displaying anti-Islamic and derogatory comments and imagery.

The inquiry concluded that there was misconduct in relation to offensive material available for sale at the charity’s premises and comments recorded as part of the programme.

The Commission’s report found a second trustee present at the time of the undercover recording failed to intervene or challenge the comments made.

It also established that the offensive merchandise was ordered on more than one occasion, and the trustees did not seek to later return or dispose of the stock.

Further highly offensive and inappropriate t-shirts depicting Nazi symbolism was advertised for sale on the charity’s online store.

An unannounced visit to the charity’s premises later confirmed that the relevant materials had been removed from sale, however offensive and inappropriate merchandise was still displayed on the charity’s online store in February 2017.

The inquiry also found wider concerns about the charity’s management and governance.

These included issues around a fundraising agreement for the sale of ‘prize draw tickets’ and ‘wristbands’ to members of the public in shopping centres in England, Wales and Scotland in order to raise awareness of the charity, which was to receive 20% of the commercial fundraising partner’s total turnover exclusive of VAT.

The Charity Commission raised concerns about the trustees had done sufficient diligence to ensure whether this agreement was in the best interests of the charity.

There were additional concerns around an unmanaged conflict of interest in respect of an agreement for the provision of bed and breakfast facilities for respite breaks which the charity’s beneficiaries were offered in Spain.

The Commission issued an order directing the trustees to wind up and dissolve the charity, in the public interest and because it was unlikely that the charity could continue to operate beyond the end of the inquiry.

The charity’s remaining funds were transferred to another charity, identified by the Commission, with similar objects to the charity. They will be used to provide support to wounded veterans and their loved ones.

Michelle Russell, director of investigations, monitoring and enforcement at the Charity Commission said: ‘The public rightly expect charities to demonstrate the highest standards of integrity and conduct. What we saw in this case fell short of that: not only was this charity mismanaged, we also saw evidence of behaviours and attitudes that have no place in charity. The organisation has now wound up, and I am pleased that we have ensured its assets are redistributed by another charity.’

Charity Inquiry:1st Knight Military Charity 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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