Decision

Charity Inquiry: Humanity Torbay

Published 25 March 2022

This decision was withdrawn on 26 March 2024

This report has been archived in line with our policy as it is over 2 years old.

Applies to England and Wales

The Charity

Humanity Torbay (‘the charity’) was registered on 10 October 2017. It was a Charitable Incorporated Organisation (‘CIO’) Foundation. The charity was removed from the Charity Commission’s (‘Commission’) register of charities on 15 March 2021 and is recorded as a removed charity.

Its activities included the provision of a drop-in centre for the local community giving them education/advice on health, wellbeing, housing, employment, and referrals to local food banks.

Background and Issues under Investigation

The Commission opened a regulatory compliance case into the charity in August 2019 due to concerns about the political nature of some of its social media content. In 2019 and 2020 the Commission provided regulatory advice and guidance to the trustees regarding political campaigning as the charity’s founder/former CEO at the time, Mrs Ellie Waugh, (‘the founder’), had posted several posts on a Facebook page used by the charity, which criticised the current government.

The Commission’s advice made it clear that the trustees should ensure that when senior staff speak publicly on behalf of the charity that those statements further the charity’s objects and are in accordance with the Commission’s guidance about political campaigning and activity. When senior staff express their own personal political views publicly, it should be very clear that those views were not the views of the charity, so as to not risk damaging the charity’s reputation.

Despite assurances being received from the trustees, posts of a political nature continued to be placed by the founder on the Facebook page used by the charity.

In addition to the concerns raised over the use of the charity’s social media for political campaigning, further regulatory concerns were identified regarding management of its financial affairs and governance. The Commission is not a prosecuting authority and does not investigate criminal matters and any allegations it received about criminal offences were referred to the Police in accordance with its usual procedures.

As a result of its regulatory concerns that there is or has been misconduct and/ or mismanagement in the administration of the charity the Commission opened a statutory Inquiry (‘Inquiry’) into the charity under section 46 of the Charities Act 2011 (‘the Act’) on 9 June 2020.

The issues under the investigation were:

• whether the trustees had complied with previously issued regulatory advice and guidance, in particular in relation to the use of the charity’s social media and Facebook, and whether they were acting appropriately in accordance with charity law, and the Commission’s CC9 guidance about political campaigning and activity

• whether the trustees responsibly managed the charity’s resources and financial affairs and complied with their duties and responsibilities generally, and whether the charity’s governance was fit for purpose

Findings

Whether the trustees had complied with previously issued regulatory advice and guidance, in particular in relation to the use of the charity’s social media and Facebook, and whether they were acting appropriately in accordance with charity law, and the Commission’s CC9 guidance about political campaigning and activity.

In June 2020 the Inquiry issued the trustees with an action plan (‘the action plan’) under s.84 of the Act which instructed them to remove all posts from Facebook and any of the charity’s other social media pages which contained inappropriate political campaigning and did not support the charitable purposes of the charity. The trustees were also directed to ensure that no similar posts would be entered on the charity’s pages in future. In addition, they were also instructed to review their procedures regarding the use of their Facebook and other social media pages and familiarise themselves with the Commission guidance regarding political activity, (CC9): ‘Campaigning and Political Activity guidance for charities’.

Limited attempts were made by one of the trustees to remove some of the political material from the Facebook page used in the charity’s name. However, as the Facebook page was originally set up and owned by the founder, they were unable to remove all the posts. Political posts continued to be entered onto the Facebook page by the founder despite the trustees being in receipt of the action plan.

Shortly after the trustees received the Commission’s letter regarding the opening of the Inquiry, the founder announced on the Facebook page that she would leave the charity.

In July 2020, the trustees met to discuss the action plan and the charity’s future. They decided that, as there had been constant adverse communications received on social media by certain groups who were against the charity and against the founder, there were no sufficiently trained personnel to fulfil the needs of the charity, and there had been a decline in the charity’s funding since the Covid-19 lockdown, they should close the charity’s operations and wind up the charity.

The Inquiry provided the trustees with appropriate advice regarding procedures to close the charity. The trustees confirmed when the charity had finally wound up and that any remaining funds were used to pay the outstanding debts of the charity. The remaining assets/equipment were donated to another charity with similar objects, and a local foodbank. As the charity was a CIO Foundation there was a three-month mandatory public notice period before it could be removed from the register.

The founder changed the title of the Facebook page to a new name, Humanity UK, which was described as a non-government, non-charity community group aimed at offering help to the homeless. However, the charity’s name and registration number (1175068) remained on the Facebook page, giving the public the impression that the charity had merely changed its name. Concerns were raised by some members of the public regarding the continued use of the charity’s name and registration number. Delays occurred in removing the charity’s details from the Facebook page, which the founder said were due to delays caused by the Facebook technical team.

In February 2021 the Facebook page was changed again by the founder with a new title of Poverty Watch UK. By late February, early March 2021 all charity details were removed from the Facebook page. In March 2021 the charity was removed from the register.

The founder admitted that she controlled the Facebook page and entered the political posts on the page. On 18 August 2021 she accepted responsibility for her actions and agreed to accept the terms of a voluntary undertaking for a period of 4 years. She will not therefore act as a charity trustee or hold any office or employment with senior management functions for any charity in England or Wales, for a period of 4 years from the date of the undertaking.

The trustees’ failure to control and prevent inappropriate material being posted on its social media pages in the name of the charity is considered to be evidence of misconduct and/or mismanagement in the charity’s administration by the trustees.

Whether the trustees responsibly managed the charity’s resources and financial affairs and compiled with their duties and responsibilities generally, and whether the charity’s governance was fit for purpose.

In July 2020 the Inquiry issued a Direction under s.47 of the Act to the trustees directing them to provide minutes of meetings from January 2019 to 2020, to obtain a better understanding of their decision-making process, and the trustees’ oversight and the control of the charity and of the founder.

The trustees were unable to send the documents electronically due to technical issues and maintained that the documents had been sent by post to the Commission. Several searches were made of the Commission’s office, but the documents were not traced.

The trustees provided assurances to the Inquiry that the funds received by the charity were distributed for charitable purposes. The Inquiry received confirmation from the Independent Examiner of the charity’s accounts, and the charity’s former Operations Manager that funding received from two funding bodies, were used to pay for the salaries of the CEO and the Operations Manager.

Information obtained from the Independent Examiner’s report contained in the charity’s accounts for the financial year ending 31 March 2019, stated that accounting records were not kept as required by section 130 of the Act. Receipts and payments prepared by the charity recorded the cash received but no records were kept to match the record of donations received to the bank deposits made. In addition, cash balances were retained and not deposited at the charity’s bank, with the majority of the charity’s expenditure being made from this retained cash, or via cash withdrawals. It is not clear who at the charity reviewed and authorised this expenditure. The only financial records seen by the Inquiry related to correspondence advising the charity of successful grant awards. This evidence strongly suggests that the trustees did not maintain appropriate financial controls for the charity and is considered to be misconduct and/or mismanagement in the administration of the charity by the trustees.

Conclusions

The Commission concluded that there had been misconduct and/or mismanagement in the administration of the charity by the trustees. The trustees breached their legal duties and responsibilities concerning political campaigning and activity. They also failed to keep sufficient control and oversight of material being published in the name of the charity, despite the Commission providing the trustees with regulatory advice and guidance on this issue. Furthermore, they also failed to keep proper accounting records which meant that there appeared to be very little control and oversight of income and expenditure by the trustees.

The founder’s conduct in relation to the posts of a political nature made by her on the Facebook page was a sustained course of action, which did not further the charity’s objects. The Commission concluded her actions to be misconduct and/or mismanagement in the administration of the charity which was or likely to have been damaging to public trust and confidence in charities.

Regulatory Action Taken

On 29 June 2020 the Inquiry issued the trustees with an action plan under s.84 of the Act which instructed them to remove all posts from the Facebook and other charity social media pages which were inappropriate political campaigning and did not support the charitable purposes of the charity.

On 14 July 2020 the Inquiry used its information gathering powers under s.52 of the Act to obtain information relating to the charity’s financial activities.

On 23 July 2020 the Inquiry issued a Direction under s.47 of the Act directing the trustees to provide minutes of meetings and other trustee records.

On 18 August 2021 Mrs Waugh signed a voluntary undertaking, accepting the terms that she would not:

• be (or act as) a charity trustee or trustee for any charity in England or Wales for a period of 4 years from the date of the undertaking
• hold any office or employment with senior management functions in a charity, in relation to any charity in England or Wales for a period of 4 years from the date of the undertaking

In deciding whether or not to take regulatory action against the other trustees, the Commission took into consideration the trustees’ particular circumstances, the nature of their conduct and any potential ongoing risk they posed. Its conclusion was that it was not proportionate to take any further action against the other trustees.

Issues for the wider sector

The purpose of this section is to highlight the broader issues arising from the Commission’s assessment of the issues raised publicly 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.

A charity cannot have a political purpose. Nor can a charity undertake political activity that is not relevant to, and does not have a reasonable likelihood of, supporting the charity’s charitable purposes.

Trustees must be satisfied that any political or campaigning activity by a charity is undertaken only in the context of supporting the delivery of its charitable purposes. Trustees must make sure they have adequate oversight over their charity’s campaigning and political activity and be mindful of maintaining their charity’s party-political independence.

The key legal principles from our guidance on political activity, that charities should remember are:

• charities cannot have political purposes, and campaigning and political activity must only be undertaken by a charity in the context of supporting the delivery of their charitable purposes
• in the political arena, a charity must stress its independence and ensure that any involvement it has with political parties is balanced; a charity must not give support or funding to a political party, candidate or politician
• a charity may give its support to or raise concerns about specific policies advocated by political parties if it would help achieve its charitable purposes, as long as it makes clear its independence from any political party
• trustees must protect their charity and not allow it to be used as a vehicle for the expression of the party-political views of any individual trustee or staff member or by a party or candidate.

Proper financial controls are a necessary feature of any well-run organisation. Trustees should ensure that adequate financial controls and policies are put in place and that sufficient information is reported back at trustee meetings, to satisfy them that the controls are being properly implemented.

It is important that the financial activities of charities are properly recorded, and their financial governance is transparent. Charities are accountable to their donors, beneficiaries, and the public. This is key to ensuring public trust and confidence in charities.