Decision

[Withdrawn] Military charities: group case report

Published 12 October 2017

This decision was withdrawn on 16 September 2020

This case report has been archived in line with our policy because it is over 2 years old.

Applies to England and Wales

1. Background

While the overall number of military charities registered with the Charity Commission (the Commission) has declined since 2007, we have seen 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 our Register that were registered since 2007.

The public gives generously to such charities, particularly during and after periods of armed conflict and during periods of remembrance. There is generally high public trust in these charities.

2. Why the Charity Commission got involved

In 2016 we identified that there were several reports in local and national media and on social media that raised issues about fundraising and safeguarding in military charities.

These included concerns about:

• some professional fundraising companies, aggressive fundraising techniques and the low percentage of collected income that it was alleged some charities were receiving from the professional fundraisers they engaged^{[footnote 1]}; and

• the adequacy of safeguarding procedures^{[footnote 2]}, particularly those assisting veterans with suspected Post-Traumatic Stress Disorder (PTSD) and other physical and mental health needs.

We had also identified from our casework that military charities appeared to be at greater risk of compliance and reputational issues, which could affect public trust and confidence. At the time this review started, the Commission was already dealing with a number of compliance cases into military charities. These cases were handled and progressed in accordance with our normal operating procedures. Some of these cases are still ongoing and the results of these cases will be reported individually in line with our usual policy and processes.

We decided to undertake additional proactive work to see if there were themes or patterns and so looked into a sample of military charities registered since 2007 which were involved in service delivery to veterans and/ or undertook public fundraising.

The aim was to seek assurances that trustees of these charities understood and were complying with their legal duties when carrying out or overseeing fundraising from the public and had proper safeguarding policies and procedures in place, where appropriate, to protect and manage the risks to the vulnerable beneficiaries they assist. It was also to identify common risk factors in these types of cases to inform future risk assessment and highlight good practice in dealing with similar issues where this was identified.

This report details the findings of that proactive work.

3. The action the Commission took

We generated a list of charities from our register, whose objects or name indicated they were military charities, removing any that were benevolent or service funds. From this list we randomly selected 21 charities.

We undertook desk based analysis and research for all 21 and conducted compliance visits on 5 where we found potentially serious concerns.

4. What the Commission found

The review found the charities were providing a wide range of services and activities including sport, a lunch club, counselling and new skills training and other activities to build confidence and help veterans get into work. These activities were appreciated by, and had a positive impact on the lives of, the veterans.

Safeguarding: The Commission found a concerning lack of safeguarding policies and practices in some of the charities and a need to strengthen existing policies in a majority of the others. From the evidence seen, this was due to the trustees not having considered their beneficiaries to be vulnerable. We found this was more likely in military charities offering support for veterans with PTSD, compared with those supporting veterans with physical disabilities caused during combat.

Fundraising: Fundraising is subject to a self-regulatory system which sets and enforces clear standards of conduct for fundraising. The Commission does have a role in fundraising regulation where trustee actions or failings, in fulfilling their duties towards their charity, pose a serious risk to the charity, or a serious risk to charitable funds, or to public trust and confidence. The Commission found that in 18 of the 20 charities, the trustees had not taken appropriate responsibility for overseeing the charity’s fundraising.

Some of those charities which engaged professional fundraisers:

• did not have a fundraising agreement in place, in breach of the legal requirement

• could not clearly demonstrate how the decision to engage the services of a professional fundraiser 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

• had not assessed or managed reputational risks associated with particular methods of fundraising being used.

Other Issues: In addition, we found 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, which meant that the charity’s assets were exposed to risks. 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 and we are continuing to engage with the trustees of this charity.

We were concerned to find most of the military charities we engaged with did not have adequate policies in place to deal with complaints. Charities, particularly those which raise funds from or provide services to the public, should consider the benefits of having appropriate procedures for dealing with complaints, and ensuring they are easy to find, follow and to comply with. Military charities often have a high public profile, so we would expect trustees to recognise this and be prepared to deal with complaints that are made. Failing to do so affects the reputation of the individual charity and more widely this can have a negative impact on public trust and confidence and accountability of other charities doing similar work.

Overall: We found that the charities we examined had generally been set up with good intentions and a passion for helping veterans. Whilst we found good examples of these charities providing vital assistance and support to their beneficiaries, some of the charities were exposed to unnecessary risk as the trustees had often failed to ensure appropriate systems were put in place to ensure good governance and compliance with legal requirements.

In terms of good practice, we saw:

• examples of effective collaborative working to provide better services to beneficiaries;

• trustees working together to make decisions in the best interests of their charity; and

• trustees being fully aware of their reporting responsibilities to the Commission, as their regulator.

Most of the charities contacted worked with us and took on board the regulatory guidance and advice from the Commission to remedy issues or concerns that had been identified.

5. Impact of the Commission’s intervention

As a result of our engagement, one charity has terminated its arrangement with a professional fundraiser. Others which used professional fundraisers but did not have an agreement now have the appropriate legal agreements in place.

We established that the issues in one case were serious enough to open an investigation, a statutory inquiry, which was opened on 10 November 2016. The inquiry is ongoing and further information can be found in our public statement about the investigation.

The Commission is still engaged with the trustees of three other charities where regulatory issues were identified.

One charity had ceased operating and was removed from the Commission’s Register of Charities. Another charity is in the process of closing down.

An action plan was issued to two of the charities, requiring improvements in governance and financial management, giving the trustees a specific time period in which to take actions to improve the situation and ensure they comply with their duties. The Commission will monitor compliance with these action plans through follow up engagement with the charities.

The other charities were provided with regulatory advice and guidance, as summarised in the annex.

Our learning from this review has informed our handling of applications to register new charities which name armed forces veterans as beneficiaries.

We have issued an alert to all registered military charities reminding them of their duties in relation to safeguarding and fundraising. We will also be undertaking further proactive engagement with other military charities. The case studies below give examples of our engagement.

6. Lessons for the charity sector

The trustees’ role is to govern a charity well. They are responsible for all aspects of their charity’s management. That includes ensuring that they take the necessary steps to safeguard their beneficiaries, act in their best interests and take all reasonable steps to prevent harm to them. This involves assessing their vulnerability and ensuring that appropriate safeguarding policies and procedures are in place. Charities that work with veterans need to be alert to the particular needs and vulnerabilities of their beneficiaries. This includes identifying and dealing with safeguarding responsibilities connected with mental as well as physical health. The Commission’s guidance Charities: How to protect vulnerable groups including children provides an overview of the basics.

If you are a trustee of a fundraising charity, you are responsible for the fundraising undertaken on your charity’s behalf, whether it is done by staff working directly for your charity or through a professional fundraiser.

The Commission’s guidance Charities: working with companies and professional fundraisers and Charity fundraising: a guide to trustee duties (CC20) provides essential guidance on fundraising. The Commission also expects trustees to use this checklist on taking responsibility for your fundraising; it helps you assess how you are doing and which areas you need to strengthen.

Trustees are legally responsible for their charity’s fundraising and should operate effective control of any fundraising done on behalf of the charity. Any arrangements trustees have with third party fundraisers must always be the best interests of their charity. Those charities that use professional fundraisers must ensure that their arrangements with these fundraisers comply with the basic legal requirements and have a written agreement in place. These rules promote transparency, protect potential donors, and give them a fair indication of the extent to which the charity (or charities) will benefit from the fundraising. The Commission has issued a joint alert with the Fundraising Regulator to charities that fundraise from the public raising awareness of this, including warning how some professional fundraisers were trying to structure arrangements with charities to avoid these rules and the transparency they bring:

Joint Alert about working with third party fundraisers and trustee responsibilities

Trustees must manage their charity’s resources responsibly and avoid exposing the charity’s assets and reputation to undue risk. All charities should have appropriate internal financial controls which are essential checks and procedures that help charity trustees. The Commission expects trustees to read, and apply, its guidance Internal financial controls for charities (CC8) and Managing charity assets and resources (CC25).

There are over 160,000 registered charities in England and Wales and many more unregistered charities. Setting up and running a charity can take a lot of work. Before setting up a new charity, individuals should consider alternative options, such as working with an existing charity. Searches can be done on the Register of Charities to obtain information about registered armed forces charities. Also further information can be obtained from the Directory of Social Change searchable register - DSC Register and the Confederation of Service Charities - COBSEO website.

Trustees are responsible for the running of their charity including dealing with complaints. Generally a complainant will raise a concern with a charity directly. This gives the trustees an opportunity to explain any misunderstandings or put things right if something has gone wrong. Complaints will be dealt with more effectively if everyone working within the charity is aware of the procedure for dealing with complaints. Useful information can be found in the following Commission guidance RS11: Cause for Complaint and CC47 Complaints about Charities.

7. Case studies

Excalibur Unit (1143735)

The Commission found the trustees had been approached proactively by a professional fundraiser, to raise funds on the charity’s behalf. We established that the fundraising agreement allowed the fundraiser to retain 80% of funds raised for the charity through the sale of merchandise. The trustees had not undertaken an open tender process to establish if other fundraisers’ services would be on equivalent or more favourable terms. The trustees stated they were satisfied the current arrangement would bring in money for the charity which it would not otherwise have received, including because the contract stated that the fundraising company would pass on in full any donations it received from members of the public in the course of selling merchandise.

We learned that the charity had received complaints about its fundraiser’s methods, including that it had been engaging in an aggressive behaviour to elicit funds from the public, about not having permission to fundraise publicly and the fundraisers not displaying the necessary identification.

The Commission had serious concerns about the apparent lack of due diligence in the trustees’ decision making process and about the potential impact on the charity’s reputation and the effect on public trust and confidence in charities.

The trustees told the Commission that they had already reviewed the charity’s future relationship with the fundraiser, and had concluded that the arrangement should be terminated and the charity should retain responsibility for its own fundraising going forward. Their decision was based both on the complaints they had received about the fundraiser, and on the poor financial returns for the charity.

However, the trustees had not officially terminated the fundraising agreement.

During our compliance visit to the charity, we provided the trustees with regulatory advice and guidance on:

• terminating the fundraising agreement and the rules around working with professional fundraisers/ commercial participators

• holding valid trustee meetings and the requirement to keep meeting minutes

• producing a complaints policy, to ensure any complaints about the charity and/or other organisations with which it is collaborating, are dealt with correctly

• producing a written conflicts of interest policy, to ensure any conflicts arising are managed appropriately

• other governance issues.

Our initial engagement concluded with us issuing an action plan to the trustees under s15 (2) Charities Act 2011. In September 2017, we followed up with the trustees to ensure they had taken the required steps. The trustees were able to provide us with evidence that they had complied with the action plan. In October 2017, we became aware of trustees’ decision to wind the charity up.

Standeasy Military Support (1161089)

The Commission engaged with this charity whose objects concerned the advancement of health of serving armed forces personnel and their families who were suffering from the effects of Post-Traumatic Stress Disorder (PTSD) by providing various treatments including acupuncture, physiotherapy, psychotherapy and counselling.

Following our intervention the trustees obtained advice from the Disclosure and Barring Service (DBS) who confirmed that it was the individual organisation that is responsible for assessing whether a DBS certificate was required for a specific role in line with relevant legislation and sector specific statutory guidance. Following this advice the trustees fully researched the issue and agreed that it was sensible to obtain DBS checks for one of their volunteers and this was obtained.

The charity also confirmed that it undertook fundraising activities but did not have a formal fundraising policy or procedure. Following our intervention the charity put in place and implemented a fundraising policy; a copy of which was sent to the Commission.

Annex - Summary of cases (in order of charity number)

Registered	Charity name	Case summary
1135355	Fishing for Heroes	Regulatory advice provided in relation to improvements needed to safeguarding, fundraising and complaints policies. In this case, we needed to follow up with trustees to ensure they made the necessary improvements. Our follow-up confirmed that they had done so.
1136166	Pilgrim Bandits[footnote 3]	Regulatory advice provided in relation to improvements needed to safeguarding policy, the need to implement a conflicts of interest policy and grant-making policy, trustee meetings, and minute taking and accounting procedures. We have since verified that most improvements required have been made; upon the receipt of the charity’s conflicts of interest and grant-making policies, we will conclude the case.
1136618	On Course Foundation	Regulatory advice provided about the need to have a formal agreement with a commercial participator and to assist the trustees in strengthening their fundraising policy and safeguarding policy. In this case, we needed to follow up with trustees to ensure they made the necessary improvements. Our follow-up confirmed that they had done so.
1136854	Scotty’s Little Soldiers	Assets of this charity have recently been transferred to the CIO of the same name (1170528). The new charity was provided with regulatory advice about conflicts of interest, financial controls and grant-making. In this case, we needed to follow up with trustees to ensure they made the necessary improvements. A follow up case is in progress to verify actions taken.
1139553	Heroes Haven Swanage	Regulatory advice provided to assist the trustees in strengthening their safeguarding and fundraising policies. No follow-up was required.
1140832	Veterans at Ease	Regulatory advice provided in to assist the trustees in strengthening their approach to fundraising. No follow-up was required.
1143326	Invicta Foundation[footnote 4]	We are in the process of looking into regulatory concerns about conflicts of interest; our case remains on going.
1143606	Hire A Hero	Regulatory advice provided regarding the lack of a safeguarding policy, fundraising and appointment of trustees. In this case, we needed to follow up with trustees to ensure they made the necessary improvements. A follow up case is in progress to verify actions taken.
1143735	Excalibur Unit	See case study.
1149579	Save Our Soldier	Regulatory advice provided about the need to have a formal agreement with a fundraiser and to assist the trustees in strengthening their fundraising policy and safeguarding policy. We have since verified that a fundraising agreement is now in place, and the trustees have strengthened the charity’s fundraising and safeguarding policies.
1149583	Bound by Veterans	Regulatory advice provided regarding the lack of a safeguarding policy. We have since verified that the charity has now implemented a policy following our advice.
1150039	Veterans of War	Regulatory advice provided to assist the trustees in strengthening their fundraising policy and their approach to updating trustee details. Charity does not have direct contact with vulnerable beneficiaries. No follow-up was required.
1150408	Forward Assist[footnote 5]	We are in the process of looking into regulatory concerns about conflicts of interest; our case remains on going.
1151359	Support British Soldiers	It was established that this charity was no longer operating so it was removed from the Register.
1153185	AF & V Launchpad Ltd	Regulatory advice provided to assist the trustees in strengthening their approach to reporting serious incidents, fundraising and updating trustee details. No follow-up was required.
1155853	Support the Heroes	We established that the issues in this case were serious enough to open an investigation, a statutory inquiry, which was opened on 10 November 2016. The inquiry is ongoing and further information can be found in our public statement about the investigation.
1158318	Once, We Were Soldiers	Regulatory advice provided to assist the trustees in strengthening their safeguarding policy and their approach to fundraising. No follow-up was required.
1159811	Suits for Troops	Regulatory advice provided regarding the lack of a safeguarding policy and on their approach to fundraising. The charity is in the process of closing down and a notice of dissolution has been received to dissolve the charity.
1161089	Standeasy Military Support	See case study.
1161119	Style for Soldiers	Regulatory advice provided regarding the lack of a safeguarding policy. We have since verified that the charity has now implemented a policy following our advice.
1163563	The Oppo Foundation	Regulatory advice provided to assist the trustees in strengthening their approach to managing conflict of interests, grant making, fundraising and accounting. No follow-up was required.

1. ‘Professional fundraisers’ are people who carry on a commercial fundraising business, wholly or mainly fundraising for charitable purposes or a person who is paid to solicit money or other property for charity. ↩

2. Safeguarding and promoting the welfare of vulnerable groups includes protecting them from maltreatment, preventing the impairment of health or development and includes activity undertaken to protect specific groups who are suffering, or are likely to suffer, significant harm. Effective protection is essential as part of wider work to safeguard and promote the welfare of vulnerable groups. However, all charities should aim to proactively safeguard and promote the welfare of their beneficiaries so the need for action to protect them from harm is reduced. ↩

3. Footnote added 22/06/2018 – this case was closed on 30//10/2017. ↩

4. Footnote added 22/06/2018 – case as closed on 01/11/2017 with follow up to be done on 01/07/2018. ↩

5. Footnote added 22/06/2018 – case closed 25/10/2017. Follow up date to be agreed. ↩