The Charity Commission welcomes the ruling as the next step in helping charities receive the funds they are owed by the Dove Trust, the charity that ran the online giving website Charity Giving.
Shortly after his appointment, the IM of the charity had concluded that there were insufficient funds for a full distribution to be made to over 1,800 charities and good causes that were owed money by the Dove Trust. Given the complexity of the charity and trust law issues involved, the Commission asked the court to decide how the IM could lawfully distribute the limited funds that were available. In March 2014, the court provided an opportunity for charities, good causes, donors and others to participate in the court proceedings. The court hearing took place on 3 July 2014.
The judge has ruled that the available funds should be distributed amongst the beneficiaries in proportion to the amounts outstanding and that there should not be any distinction in treatment between those who contributed before the appointment of the Interim Manager and those who contributed afterwards. This is known as the pari passu approach. The Judge, Mr Justice Henderson, felt this was the best method of achieving fairness between all the donors and beneficiaries in the circumstances.
The Court will now issue an Order on the basis of the distribution. It is for the IM to carry out checks and calculations to confirm how much each of the charities and good causes will receive under this approach, and to determine the practicalities of making the distribution so that the funds can be distributed as soon as possible. The IM expects to be able to start making initial distributions in September.
Kenneth Dibble, Chief Legal Adviser at the Charity Commission said:
This decision has clarified the legal basis on which the Interim Manager currently holds the funds belonging to the charity and the way in which they should now be distributed. We appreciate the patience of the charities and good causes who are still waiting for the money they are owed by the Dove Trust and we are pleased that this clear ruling by the court means that the IM can now proceed with a lawful distribution.
We recognise that charities, good causes and generous donors may still be disappointed that their donations will not be paid in full and we are looking into all available options for recovery of further funds which are owed by the charity.
Ultimately it is the trustees who are responsible for the management and administration of the charity and to account for any shortfall of funds.
The Charity Commission investigation into the Dove Trust is ongoing.
For details of the judgment, please refer to www.charitygiving.co.uk.
Notes to Editors
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- The Charity Commission is the independent regulator of charities in England and Wales.
- Our mission is to be the independent registrar and regulator of charities in England and Wales, acting in the public’s interest, to ensure that:
- charities know what they have to do
- the public know what charities do
- charities are held to account
- The judge also clarified the legal basis on which the funds are held by the Dove Trust, deciding that the funds were subject to both trust and contract obligations. For full details please refer to the judgment, which will be published at www.charitygiving.co.uk.