Charity Commission inquiry into The Captain Tom Foundation: Key takeaways for charity trustees

The Charity Commission (“Commission”) has announced a new statutory inquiry into The Captain Tom Foundation, “after identifying concerns about the charity’s management, including about the charity’s independence from the family of the late Captain Sir Tom Moore and businesses connected to them.” https://www.gov.uk/government/news/regulator-announces-statutory-inquiry-into-the-captain-tom-foundation

The inquiry will consider whether the trustees have:

• been responsible for mismanagement and/or misconduct in the administration of the charity and whether, as a result, the charity has suffered any financial losses, including through any unauthorised private benefit to any of the current or previous trustees;
• adequately managed conflicts of interest, including with private companies connected to the Ingram-Moore family;
• complied with and fulfilled their duties and responsibilities under charity law.

The Commission may extend the scope of the inquiry if additional issues emerge

The inquiry marks the latest high profile example of the Commission’s focus on benefits to charity trustees and managing conflicts. 

The Commission has not made any conclusions at this early stage, but the issues raised are a useful reminder to charity trustees to ensure good governance in order to protect the reputation of their charities.

• Benefits to charity trustees and connected persons – Charity trustees (and the people or organisations connected to them) cannot benefit from their charity in return for services they provide to it unless authorised by the charity’s governing document, the Commission or the courts.  Any benefits must be in the best interests of the charity and properly considered and reported in line with Commission guidance.

In practice it can be difficult for charity trustees to determine the “reasonableness” of a particular benefit.  The outcome of the inquiry and the Commission’s summary of its previous engagement with the charity regarding remuneration of a connected person (and former trustee) provides helpful insight into what does and does not qualify as reasonable or justifiable in the eyes of the Commission.

• Managing conflicts of interest and loyalty - Charity trustees are required to manage conflicts as they arise by following the Commission’s four stage checklist (declare, remove, manage and record the conflict). This applies to conflicts of interest (for example when a trustee or a person connected to them has an interest in a proposed arrangement) as well as conflicts of loyalty (where trustees owe competing duties to the charity and another person or organisation).

The inquiry demonstrates the importance of robust trustee decision making and record keeping in case queries are raised by the Commission in the future.

Where risks are not properly considered or managed, the Commission has wide ranging protective and enforcement powers which include making an order to remove a charity trustee or disqualify them from acting in the future, restricting the use of the charity’s bank accounts, requiring repayment of any unauthorised benefits and/or winding up the charity.

Should you wish to discuss this any further please contact Catherine de Maid or Alyssa Haggarty.

The Charity Commission has opened a statutory inquiry into The Captain Tom Foundation, after identifying concerns about the charity’s management, including about the charity’s independence from the family of the late Captain Sir Tom Moore and businesses connected to them.

https://www.gov.uk/government/news/regulator-announces-statutory-inquiry-into-the-captain-tom-foundation