The Charity Commission, the independent regulator of charities in England and Wales, has today published a report setting out its conclusions in its recent case following concerns about a commercial partnership between Age UK (registered charity number 1128267) and the energy company E.ON. The concerns centred on allegations that the charity was receiving a significant sum of money to promote a particular tariff more expensive than others available.
The commission recognises that the diversification of fundraising methods is an evolving area in the charity sector and one at which Age UK has, in some respects, been at the forefront. We recognise the benefits a stable and secure income stream can bring to a charity. We also recognise the benefits commercial relationships and partnerships can bring to charities and beneficiaries. Given the inherent risks in such arrangements, however, to a charity’s brand and reputation, we are also clear that decision making and controls around such arrangements are critical.
The commission found that the trustees had processes in place for reviewing the suitability of products prior to selection. However it was not clear that Age UK, having complied with its processes, sufficiently considered the risks of targeting beneficiaries with a commercial product in an area where the charity also campaigns on behalf of its beneficiaries. The commission has warned that participation in the energy market poses significant risks to a charity, and says Age UK should consider whether continued involvement is in the charity’s best interests.
The commission also sought to establish whether the trustees had appropriate processes for oversight and control of the commercial partnership with E.ON to ensure it remained in the best interests of the charity throughout. Although the charity had oversight mechanisms, the commission found these were insufficient and needed to be kept under more regular review.
The commission found that the nature of the commercial partnerships across the range of services, and the fee or commission received by the charity through the trading subsidiary, was not made clear to customers. It recommends that Age UK clearly identifies any commission or fee received by the charity on all Age UK branded products.
The commission has made a number of further recommendations to the charity to ensure that they are fully compliant with their legal duties. These are all contained in the full report.
David Holdsworth, Chief Operating Officer at the Charity Commission said
Working with a company may bring many benefits for a charity including raising funds and increasing awareness of the cause. However a charity’s name and reputation are valuable assets which trustees must protect.
Participation in the energy market poses significant risks and Age UK should consider whether continued involvement is in the charity’s best interests. Although the charity had oversight mechanisms, the commission found these were insufficient and needed to be kept under more regular review. Any fee or commission that the charity receives through these arrangements must be clear and transparent.
The commission is pleased that the charity has already taken some steps to address our concerns and we have made a number of further recommendations. The support offered by Age UK is invaluable to many.
Notes to editors
- The Charity Commission is the independent regulator of charities in England and Wales. To find out more about our work, see our annual report.
- To search for charities on our online Register go to our website.
- Details of how the commission reports on its regulatory work can be found on GOV.UK.
- Age UK charity is a charitable company limited by guarantee and its purposes are to promote any charitable purposes for the benefit of older people. The energy contract was made between E.ON and the charity’s subsidiary trading company, Enterprises UK.
- The Charity Commission issued an alert on 29 February 2016 urging charities to review their commercial partnerships.
- Today, Ofgem also published a statement having looked into E.ON’s marketing of its tariffs with Age UK. The statement can be viewed on the Ofgem website.