The well known Captain Tom Foundation was the subject of a Charity Commission statutory inquiry. Some issues arising there should be taken note of by other charity organisations or those planning to register a charity.
Conflicts of interest must be identified and managed.
Trustees must always act in the best interests of the charity. In The Captain Tom Foundation case decisions were made not in the best interests of the charity. This damaged the charity’s reputation. The problem was that two trustees had significant amounts of private benefit. This could have been avoided if the unconflicted non family trustees had sufficient oversight and information to be able to identify and then react to those two trustees actions. To positively identify conflicts of interest and deal with them would have been in the best interests of the charity and avoid damage to reputations of trustees and the charity.
A Trustees cannot benefit from their position as trustee of a charity.
Charity law requires that trustees and those connected to a trustee must not benefit from the charity in return for any service they provide to it. This rule extends to payments made to trustees providing services on behalf of the charity. Some limited exceptions to this rule, must be approved by unconflicted trustees and conditions imposed by law complied with. In the case of Captain Tom Foundation some of the charity’s intellectual property was owned by the family’s private companies and the charity paid those family trustees for use of that intellectual property. This was a clear benefit which should have been either stopped or referred to the Charity Commission for their views.
Certainly the arrangement should have been regulated by legal agreements. The Charity Commission demands transparency to ensure the donating public have an understanding of when a brand is being used for private gain.
Protect intellectual property
On registration, the Captain Tom Foundation was advised by the Charity Commission to put in place agreements with the private family company that owned the Captain Tom trademark and other intellectual property. They failed to do this. This meant that the charity could never act independently in the best interests of their beneficiaries because the name of the charity was owned by a private family company.
The Charity Commission demands transparency when a brand is being used for private gain. The public must be kept informed because if they do not know whether it is the charity or private individuals who are benefiting in some way from donations – this may damage the reputation of the charity sector as a whole.
If you would like advice on the issues which may affect your charity contact:
mikefarrell@charity-registration.com or call 07710141058.
