It certainly seems that there is enough guidance, legislation and regulations governing charities and charity work, it’s not a lack of this that is the issue. It is the Charity Commissions reluctance to do its job and use its regulatory powers that is the problem.
Where there is no adequate or functioning regulatory body then there is the opportunity for criminal activity and abuse. In fact, knowledge about the lack of regulation can only encourage criminals to enter the charity arena, there are easy pickings and little or no risk.
If criminality and fraud is discovered it is extremely unlikely that this will ever be reported to the police ( 9 times only between this 2012 and 2020) and certainly not by the Charity Commission. The Commission will forgive, cover up and forget. The Commission believe any recognition about this type of activity will damage the public’s faith in charities and so appear to sweep it under the carpet, keeping it as far out of sight as possible.
Registering a charity is a fairly simple process and along with that easy registration process comes the automatic badge of charity respectability, the tax breaks and the knowledge that they can pretty much do anything they want (and get away with it). If a member of the public does complain to the Commission about a charity’s activities the Commission will immediately consider the complainants to be hostile. The Commission will go into ‘defend the charity’ mode, circle its wagons around the charity trustees and protect them at all costs. It is very clear from our own direct experiences and research into other complaints that this is the Commissions modus operandi in practically every case.
This approach cannot fail to make charity registration an attractive opportunity for fraudsters, con artists and thieves. Not only does the charity regulator fail to investigate complaints appropriately, the regulator automatically presumes the trustees are innocent or at worst have just made a few mistakes. The Commission will accept information given by trustees without the need for evidence (their case work guidance actually describes a charity as a more reliable source of information) and without the need to validate any of the information they are given.
This is not the approach of any other investigative or regulatory body.
Charities are expected to follow SORP guidelines in their accounts reporting but no one checks that they have, it follows that good charities who want to get it right will apply SORP but bad charities who have things to hide, will not.
Below a certain level of funds the independent examiner who signs off a charity’s accounts does not need to be a qualified accountant. The independent examiner is paid by the charity for their signature on the accounts and the checks an independent examiner makes are perfunctory and basic ie: Q: have you spent this grant as stated and with the restrictions …….A: yes.
If questions of fraud are raised by the public the Commission will ignore them in favour of a bad charity’s narrative of oops a little mistake. The Commission allow accounts to be altered to cover up ‘little mistakes’ months and months after they have been filed and does not require a charity to have them resigned and redacted to show the changes. The independent examiner is not informed. An open invitation for fraudsters and thieves.
Filed annual reports are not checked for truth, reports can be filled with incredible claims and amazing achievements; all untrue, nobody checks. If reported as untrue the reporter will be treated as hostile. The charity will simply be asked, is it true ? if the charity says yes, the Commission will be satisfied, no checks, no request for evidence.
If the charity claims to work overseas then it is even easier to fool the Commission. Charities can look fantastic and amazing on paper ( the Commission want and encourages them to ) when in actuality, if they run projects at all, the projects can be kept poor and under-resourced and could not possibly match the wonderful achievements claimed. An open invitation for fraudsters and con artists.
There are no checks at all to ensure that money supposedly spent on charity activities is spent on the activities. That money for restricted purposes is spent on those restricted purposes. Large ‘grants’ can be donated with no checks on their origin and then forwarded to ‘projects’ with no checks on whether they exist. An open invitation for money laundering, organised crime and thieves.
The Commission only files accounts for 5 years and charities are rarely audited and so if a charity can escape notice (which is easy) for 5 years then they will have got away with it. Add to this the Commissions position that they will not consider or investigate historical issues ( just 3 years ago) then its very easy to see why ‘charity work’ is attractive to criminals.
Following what the Commission describes as an investigation, following a complaint, the Commission will make their final decision, in secret. If they report back to the complainant at all it will be to say that they have fully investigated and considered all the information and evidence provided. The public are expected to have complete faith and believe that the Commission have done this part of their job fully and appropriately, there is absolutely no scrutiny or quality check on the Commissions work. The decision is always in favour of bad charity managers and those who are prepared to fabricate and lie. Good charity managers, who tell the truth about what are genuine mistakes, fare far worse.
Some charities will be left with advice and guidance by the Commission and at worse an action plan. It then takes about 4 years at least (sometimes a lot longer) of the charity not meeting the action plan or following the Commissions guidance ( usually 4 more years of complaints ) before the Commission will actually use its power to open a statutory inquiry. An inquiry that itself can take years. So 4 years more of actively seeking and receiving public donations and continuing to deceive and misappropriate money. YOUR money, with the full knowledge of the Commission that the charity is dishonest.
Add to all this the fact that the Commission following an inquiry that shows theft and dishonesty rarely seek the return of any ‘missing’ funds themselves and they rarely, if ever, report missing funds, fraud, theft etc to the police or an appropriate authority. The most likely punishment for the perpetrators is being removed as a trustee or being banned from being a trustee. This level of punishment will obviously leave con artists, fraudsters and criminals shaking in their boots.
Of course under the Commission's regulations it’s easy to register another charity as a banned trustee under a slightly different name, it won’t be checked or easier still get your partner to register one.
