Decision

Charity Inquiry: Burke's Peerage Foundation

Published 5 September 2024

Applies to England and Wales

The charity

Burke’s Peerage Foundation (‘the charity’) was registered with the Charity Commission (‘the Commission’) on 5 February 2014 and was governed by a Declaration of Trust dated 5 January 2014.

The charity was removed from the Commission’s register of charities on 2 August 2023.

The charity’s objectives were: To advance the education of the public in the United Kingdom in the subject of genealogy and personal heritage.

William Bortrick (‘Mr Bortrick’) and Mark Ayre (‘Mr Ayre’) were trustees of the charity from the 5 February 2014.Trustee minutes obtained by the Inquiry record the appointment of a third trustee (‘trustee C’) on 16 July 2022 and their resignation on 14 September 2022. Trustee C was primarily appointed to conduct a viability review of the charity’s future, and they have informed the Inquiry that they were not involved in any decision making.  The Commission did not consider that trustee C was responsible for any of the findings of the inquiry and the reference to ‘the trustees’ throughout the report refers to Mr Bortrick and Mr Ayre only.

Background and Issues under Investigation

The Commission contacted the charity’s trustees in February 2022 after a separate inquiry into another charity, The Mahfouz Foundation, identified links with Burke’s Peerage Foundation.

The Commission reviewed the charity’s bank statements and compared the information obtained against the Annual Returns submitted by the trustees and identified significant discrepancies. The   charity had declared an income and expenditure of exactly £10,000 in each of the five financial years ending (‘FYE’) 5 April 2017 to 5 April 2021, but significantly more funds had flowed through the charity’s bank account.

On 10 February 2022, the Commission opened a statutory inquiry (‘the inquiry’), under section 46 of the Charities Act 2011 (‘the Act’), into the charity. The inquiry examined the following regulatory issues:

• the extent to which the trustees were complying with their legal duties in respect of their administration, governance, and management of the charity and in particular
• their compliance with legal obligations for the preparation and filing of the charity’s accounts and other information or returns

The inquiry closed with the publication of this report.

Burke’s Peerage Limited and Burke’s Peerage Enterprise Limited (‘the companies’)

Burke’s Peerage is a guide to the genealogy and heraldry of historical families worldwide including the Peerage, Baronetage, Knightage and Landed Gentry of the United Kingdom.

Burke’s Peerage Enterprise Limited, is a company limited by shares. Mr Bortrick and Mr Ayre are its only directors. They each own 50% of the shares and are recorded as persons with significant control. Burke’s Peerage Enterprise Limited deals with the trading side of Burkes Peerage and owns and operates the Burke’s Peerage website which includes processing the subscriptions to the online resources and enquiries for genealogy work.

Burke’s Peerage Limited is a company limited by shares. Mr Bortrick and Mr Ayre are its only directors. Mr Bortrick is the only person with significant control because he owns more than 75% of the shares. The company owns the assets, rights, titles, copyright, and trademarks associated with the records and collections of books of genealogical and heraldic interest which bear the name, Burke’s Peerage.

Findings

Conflict of interests

The inquiry found that the trustees failed to properly identify and manage conflicts of interest when administering and managing the charity and that the ability of the trustees to effectively operate and manage the charity separately from their companies and avoid conflicts of interest was seriously compromised.

The charity did not have a conflicts of interest policy and despite the obvious connections, the trustees did not appear to understand how to identify and manage conflicts, or the importance of doing so. The trustees did not appreciate that also being the directors of the companies, meant that they were connected parties which in turn gave rise to a conflict of interest if the charity entered into any agreements, contracts or transactions with the companies.  For example, the inquiry found the charity paid for insurance which would cover legal fees to protect the Burke’s Peerage name, which is owned by Burke’s Peerage Limited. The charity bore the full cost for this service which benefitted a company owned by Mr Bortrick and Mr Ayre

The charity did not have its own separate email account; therefore Mr Bortrick used his company email address when dealing with correspondence on behalf of the charity, and it is unclear if members of the public were aware of whether they were dealing with the charity or one of the companies.

The inquiry found, a number of third parties were unaware that payments they had thought had been made to one of the companies, had been made to the charity’s bank account. Invoices and emails, seen by the inquiry, for genealogy enquiries dealt with by Mr Bortrick, included the charity’s bank details for payments.

Charity Annual Returns and Accounts

The inquiry reviewed the charity’s finances from FYE 5 April 2019 to 5 April 2022 and found the trustees had failed to accurately record and report the income and the expenditure of the charity during this period.

The trustees explained that they had used the Commission’s guidance on reporting and accounts and as the income and expenditure of the charity had fallen below £10,000 in each year, they thought they had to put £10,000 as the figure in the Annual Returns.

When the income and expenditure recorded in the bank statements was compared with the activity in the charity accounts, it was evident that there was significantly more activity than the trustees reported:

• over this period the Annual Returns recorded income of £30,000 but £126,774.02 more was deposited into the charity’s bank account
• over this period the Annual Returns recorded expenditure of £30,000 but the sum withdrawn from the charity’s bank account was £88,028.37 more

Knowingly or recklessly providing information to the Commission that is false, or misleading is an offence under s60 of the Act.

The inquiry noted that any charity with an income of over £25,000 has a statutory obligation to submit accounts to the Commission. By misrepresenting the charity’s income on the Annual Return form the trustees had given the incorrect impression that the charity was exempt from the need to submit accounts.

The inquiry found this failure to comply with statutory duties to submit accurate financial information demonstrated an unwillingness and/or inability by the trustees to act with reasonable care and skill to fulfil basic trustee responsibilities in the best interest of the charity and is evidence of mismanagement and/or misconduct in the administration of the charity.

Misapplication of a donation

The inquiry found that the charity received a donation of £50,000 from a corporate donor (‘the CD’) in 2020 which had not been accounted for in the charity’s Annual Return for that financial year. The trustees initially informed the inquiry that this donation was deposited into the charity’s bank account in error, and it should have gone to one of their companies.

The inquiry contacted the CD who confirmed that they understood that they were making the payment to the charity. It provided evidence that in advance of the donation being made the trustees had provided the CD with proof of its charitable status.  It was clear that the CD believed they were donating to the charity and that it had requested the donation be used to support ‘Heritage’ projects.

During the first meeting with the trustees, on 19 July 2022, they confirmed that an associate had asked them to provide support to a third-party charity (‘TPC’) which the associate represented.  As part of this support, the charity would receive the £50,000 donation from the CD.  The associate then directed the trustees where the funds were to be applied.  The trustees explained they were trying to provide support during the early part of the Covid pandemic.

The inquiry found that £20,000 of this donation was used to pay for building work at the TPC, whose objects included maintenance of an historic property and gardens. The inquiry concluded that whilst this payment did not support the objects of Burke’s Peerage Foundation, the funds had been used as the CD had intended.

The inquiry found that the remaining £30,000 was transferred to a catering company, to support it during the Covid Pandemic. The trustees informed the inquiry that they were directed to apply the funds this way by the associate. The trustees did not question these directions, nor complete any due diligence on the company and simply followed the direction to apply the funds in two payments.

The inquiry found that supporting this catering company furthered neither the objects of the charity nor the intentions of the CD. Consequently this £30,000 had been misapplied by the trustees and is evidence of mismanagement and/or misconduct in the administration of the charity.

Payments outside of the scope of the charity’s objects

The inquiry found that the trustees failed to adequately safeguard the charity’s property by using charity funds to make purchases that did not further the objects of the charity.

These included five payments totaling £9,460 which the inquiry identified as purchases from an antiques shop and an auctioneer made between 21 August 2020 to 9 April 2021. The invoices, all made out to Mr Bortrick, recorded the following purchases;

• a Prince Charles Investiture chair from 1969, later presented to a Cathedral
• a signed informal portrait of Lady Elizabeth Bowes-Lyon dated 1922, later presented to a museum
• a Dresden porcelain figurine of an Archer from 1937, later presented to a museum
• a Silver portrait relief of Queen Elizabeth dated 1977 and a porcelain figurine of a Yeoman of the Guard from 1937, later presented to a separate charity
• a painting by Edwin Hayes, presented to a charity based in Ireland
• Bentwood Hat and Coat stand, later presented to a charity based in Ireland

The charity’s accounts record these five purchases as each being a ‘Heritage Presentation.’

It has not been fully explained by the trustees why these items were chosen to be presented, and the inquiry did not accept that these purchases educated the public about genealogy and personal heritage.

Third party use of charity’s bank accounts

The inquiry found that the trustees misapplied the funds of the charity and allowed them to be used for the benefit of third parties.

The inquiry found that on 8 March 2021 the charity had made a payment to The College of Arms of £8,375, for an application for a coat of arms, crest, and badge for an American individual not connected to the charity. The trustees stated they had hoped that by paying for the application on behalf of the individual, they would agree to sponsor an annual grant the trustees had wanted to establish for The College of Arms.  During its annual audit, The College of Arms considered it was uncertain whether the charity had a charitable reason to make this payment, and the full sum was refunded on 6 May 2022.

The trustees also made a payment of £3,900 to RSA (The royal society for the encouragement of arts, manufactures and commerce) (‘the RSA’). The inquiry found that this payment was for a fellowship of the RSA for an individual who had been a recent patron of the charity. The trustees explained that as the RSA was a charity, they thought the payment needed to come from another charity. The trustees have confirmed the payment has subsequently been refunded to the charity by one of the companies they are also directors of.

It should be noted that the inquiry does not consider the RSA or The College of Arms to have acted inappropriately in their dealings with the charity.

Book Sales

The inquiry found that the trustees gave contradictory statements in regard to the sale of four collections of Burke’s Peerage books.

The trustees initially explained at a meeting with the Commission on 8 June 2022 (‘the first meeting’) that the book collections were owned by Mr Bortrick and that he had donated them to the charity, which in turn sold them, raising funds for the charity. In the same meeting, the trustees then contradicted this by indicating that Mr Bortrick had sold the book collections and wanted the proceeds to be personal donations to the charity.

The inquiry found that these were straight forward sales of the book collections. Whether the charity sold the books or Mr Bortrick sold the books, it is clear the intention was that the charity should benefit from the proceeds of the sales.

The inquiry further found that following the first meeting, the trustees transferred the proceeds of the sales from the charity’s bank account back to the original purchasers of the book collections. This transfer of funds represented a clear loss to the charity which constitutes a breach of duty by the trustees.

Trustee Benefits

The inquiry found that the trustees received personal benefit from purchases made using funds from the charity bank account.

A desk and a bookcase were purchased on 21 December 2019 and 16 June 2020 respectively, for a total of £16,000 from an antiques dealer and were then kept at Mr Bortrick’s home address. The trustees claimed in a letter, dated 27 September 2023, that the storage of the furniture at a trustee’s home resulted in a saving to the charity in respect of costs and “…provided no benefit to Mr Bortrick who did not have any useful purpose for them.”

This was a direct contradiction of the account Mr Bortrick provided to the inquiry at the first meeting when he stated that “I bought a bookcase from …., and a desk to write on, so that’s what I used those donations for. And in fact, I didn’t have a desk at home, and I use the desk, and I’m using the desk to write my book.”  Of the bookcase, Mr Bortrick said “And the bookcase houses the rather precious collection of Burke’s books”. These books were confirmed to be Mr Bortrick’s personal collection.

The trustees stated that the intention was to gift the desk and bookcase at some point in the future. The inquiry found there was no record of this intention recorded within any minutes of trustee meetings and it is unclear how such a gift would further the charity’s objects.

The trustees also purchased two life memberships of a botanical garden on 26 September 2020, costing £750 each. Two further life memberships were purchased on 28 July 2021 for the same cost. Two of these life memberships were for the trustees, one for the charity’s patron and another for a donor. The inquiry found these life memberships came with benefits, including discounts at the shop/café, invitations to events including garden parties and free entry to other Gardens and Arboretums around the country. At the request of the trustees, the payments totalling £3,000 were returned to the charity and the trustees made arrangements to pay for the memberships privately.

The inquiry found that the situation could have been prevented had the trustees not used the charity’s funds to make the purchases. It further found the trustees had failed in their legal duty to ensure that the charity’s funds were applied solely and reasonably in furtherance of its objects, which is misconduct and/or mismanagement in the administration of the charity.

Breach of an Order issued by the Commission

On 31 May 2022, the Commission issued an Order under section 84A of the Act directing the trustees to not allow the charity’s bank account to be used for purposes other than charitable activity in furtherance of the objects of the charity.

The inquiry found that between 20 June and 11 July 2022, over one hundred transactions took place in the Charity’s bank account.

The majority of the transactions were for one of two reasons, the first being the transfer of funds into the charity’s account to repay payments that the trustees considered could have been made privately or by their companies instead of the charity, including the payments to the RSA, the antiques shop, and auctioneers.

The second was withdrawals from the charity’s bank account, including the transfer of approximately 60 donations made by Mr Bortrick totalling £42,986.07, to one of the companies Mr Bortrick was a trustee of. These withdrawals, which the trustees were responsible for were in breach of the Order.

The inquiry considers the breaching of a Commission Order to have been mismanagement and/or misconduct in the administration of the charity by the trustees.

Donations received from Mr Bortrick

Burkes Peerage Enterprises (‘BPEL’) undertakes genealogy research for members of the public for a fee. The inquiry found that during Covid, some of those fees were directly paid to the charity.

The inquiry received contradictory accounts regarding these payments. The trustees initially described at the first meeting that that the funds were payments for genealogy work completed by Mr Bortrick and due to BPEL, but he had wanted to donate these payments to the charity.

The inquiry found individuals who had engaged Mr Bortrick for genealogy work, were unaware that their payments had gone directly to the charity and invoices issued were on paper headed ‘Burke’s Peerage’ and contained the bank details for the charity.

During a second meeting with the inquiry on 12 October 2022 (‘the second meeting’) the trustees stated that Mr Bortrick had reserved the right to recall these donations.  There is no mention in trustee meeting minutes which record or indicates that Mr Bortrick reserved any right to recall these donations, despite the trustees claiming that this had been recorded in the charity’s records.

In later correspondence from the trustees, this narrative changed. The trustees asserted that these payments were not donations but payments to cover the charity’s “activities and heritage presentations,” mainly during the Covid Pandemic as they were not receiving any other funding.

BPEL meeting minutes noted the decisions to donate certain payments to the charity with the following statement, “It was decided to send the payment for this work direct to Burke’s Peerage Foundation for its activities/heritage presentations, and if that changes or is not required, it will be returned to Burke’s Peerage [the company]”. 

There were no charity records that record these payments were to be returned if the charity no longer required them, nor was it clear what needed to change to trigger the return of the donations. The inquiry found no evidence that the trustees of the charity made a quorate unconflicted decision that these funds were no longer required.

The inquiry did not accept that the donations were made with a proviso that they could be recalled. The inquiry found these funds were payments for services provided by Mr Bortrick and donated to the charity as initially described.

The inquiry found the trustees made the decision to refund these donations from Mr Bortrick.  Instead of the donations being returned directly to himself, £42,986 went to a company (BPEL) of which both trustees are also directors. This was a misapplication of charity funds and a breach of the trustees’ duties which caused a significant loss to the charity.

Conclusions

The Commission concluded that there was serious misconduct and/or mismanagement in the administration of the charity due to the poor financial management and governance. There had been a lack of separation between the charity and the companies connected to the trustees. The trustees had failed to maintain accurate financial records and had allowed the charity’s bank accounts to be used for non-charitable purposes. More significantly, the trustees had done this whilst misrepresenting the charity’s income in such a way that gave the appearance that it did not need to submit accounts to the Commission.

The trustees failed in regard to their duty to act in the charity’s best interests, manage the charity’s resources responsibly and act with reasonable care and skill in making decisions and is evidence of their mismanagement and/or misconduct in the administration of the charity.

The Commission also concluded the trustees to be unreliable witnesses as demonstrated by the contradictory statements given in writing and during the meetings, specifically in relation to the donations made by Mr Bortrick. Such contradictory statements cannot simultaneously be correct. Providing information during the course of an inquiry that is false or misleading is an offence in accordance with section 60 of the Act.

The Commission further concluded that the actions of Mr Bortrick and Mr Ayre were significantly below that expected from trustees and they were both disqualified as trustees of the charity for a period of 12 years.

Regulatory Action Taken

The inquiry exercised the Commission’s regulatory powers under sections 52 and 47 of the Act on multiple occasions to obtain further information and copy documents, including from the trustees and the charity’s bank.

On 31 May 2022, the Commission issued an Order under section 84A of the Act directing the trustees to not allow the charity’s bank account to be used for purposes other than charitable activity in furtherance of the objects of the charity.

On 16 September 2022, the Commission issued an Order under section 84A of the Act directing the trustees to not take any action to dissolve the charity while it was still subject to a statutory inquiry.

On 24 January 2023 the Commission issued a letter to the trustees advising it considered that £113,080 of charitable funds had been misappropriated and that it was the responsibility of the trustees to make good any loss suffered by a charity as a result of their breach of trust.  The trustees agreed to repay the funds and completed the repayment on 5 May 2023.  Prior to the dissolution of the charity, the remaining funds of the charity, £121,455, were donated to another charity who confirmed they would be used in line with the objects of Burke’s Peerage Foundation.

On 24 April 2023, the Commission issued an Order under section 76(3)(d) of the Act directing the charity’s bank to not part with any property which it holds on behalf of the charity, without the prior written approval of the Commission.  This Order was discharged on 24 July 2023, and the Commission utilised the supplementary provisions under section 337(1) of the Act to direct the charity’s bank to close the account.

On 25 July 2023, the Commission issued notices of its intention to disqualify the former trustees, William Bortrick and Mark Ayre, from trusteeship and senior management functions in all charities in England and Wales under section 181A of the Act for a period of 12 years.

On 26 September 2023, Mr Bortrick and Mr Ayre made representations to the Commission regarding the proposed disqualification. These representations were considered by an independent reviewer as part of the Commission’s decision review procedure. The outcome of the decision review confirmed the Commission should proceed to disqualify both Mr Bortrick and Mr Ayre from trusteeship and senior management functions for 12 years.  This was communicated to Mr Bortrick and Mr Ayre on 3 January 2024.

On 5 January 2024, the Commission issued disqualification Orders to the former trustees, William Bortrick and Mark Ayre, under section 181A of the Act, these took effect on 16 February 2024. In compliance with section 182 of the Act, the names of the former trustees were officially entered into the Register of Removed Trustees.

Issues for the Wider Sector

The purpose of this section is to highlight the broader issues arising from the inquiry that may have relevance for other charities.

It is not intended as further comment on the charity in addition to the findings and conclusions set out in the earlier sections of this report but is included because of their wider applicability and interest to the charity sector.

Complying with Orders and Directions of the Commission

Charity trustees must comply with Orders and Direction of the Commission. In some circumstances it may be a criminal offence (or contempt of court) for a charity or a trustee to not comply with an Order or direction of the Commission.

Managing finances: the important message for trustees

As the charity regulator, the Commission expects trustees to discharge these duties by regularly assessing and monitoring the overall financial position of their charity and by taking steps to ensure that its funds can continue to be used for the purposes for which they were given.

All charities with an income over £25,000 must file their accounts and an annual report to the Commission.

Further guidance on charity accounting can be found on GOV.UK.

Managing Conflicts of interest and loyalty

The Commission recognises that it is inevitable that conflicts of interest will occur, and they are more likely when there are only a small number of trustees on the board, when trustees are closely related, or when the charity has dealings with organisations in which the trustees have interests. It is vital that trustees avoid becoming involved in situations in which their personal interests may be seen to conflict with their duties as trustees. Even the appearance of a conflict of interest can damage the public’s trust and confidence in the charity, so conflicts need to be managed carefully, and trustees should put in place policies and procedures to identify and manage such conflict.

Further guidance and advice on conflicts of interest can be found on GOV.UK.