Decision

Team Syria

Published 13 September 2019

This decision was withdrawn on 18 January 2022

This Inquiry report has been archived as it is over 2 years old.

The Charitable Fund

This report concerns the Charity Commission’s (‘the Commission’) inquiry that was opened into charitable funds raised by and held in the name of Team Syria (‘the charitable fund’).

Issues under Investigation

Background

The Commission opened a compliance case into the charitable fund in April 2015 after proactively identifying its website. The website made several statements which the Commission considered showed that it was raising funds and/or property for charitable purposes in England and Wales, specifically to relieve the need of people affected by the Syrian conflict.

The Commission engaged with the contact of the charitable fund on 7 July 2015 to ascertain whether it was required to register as a charity and to ensure that the trustees were appropriately managing any charitable funds. Individuals in control of charitable funds and/or property have the same legal duties and responsibilities as if they were named as trustees of a charity. Engagement with Trustee A indicated that he was the founder and sole trustee of the charitable fund. It was determined that the funds raised by the organisation were charitable.

On 28 February 2016, Trustee A was charged by the police with an offence. As a result of the criminal investigation that led to the charge, a quantity of cash totalling £7,691.92 (‘the seized funds’) was seized from Trustee A upon his arrest as well as from properties associated with him. Following a criminal trial in December 2016, Trustee A was acquitted of the charge.

On 1 June 2017, as a result of information disclosed to it by the police and Trustee A, a statutory inquiry (‘the inquiry’) into the charitable fund was opened under section 46 of the Charities Act 2011 (‘the act’).

The scope of the inquiry was to examine a number of issues including:

• whether or not the seized funds held by the police were the proceeds of charitable donations and whether regulatory action was required to secure the proper application of these
• trustee A’s involvement in, and management of, the charitable fund
• whether funds donated to and/or raised by the charitable fund have been properly applied and can be accounted for
• trustee A’s conduct and suitability to act as a trustee

Soon after the opening of the inquiry the Commission used its power under section 76(3)(d) of the act to direct the police not to part with the seized funds. Further information is provided under the section ‘regulatory action taken’.

The inquiry closed with the publication of this report.

Findings

Whether or not the seized funds held by the police were the proceeds of charitable donations and whether regulatory action was required to secure the proper application of these

As set out in the background section above, initial information identified regarding the website of the charitable fund indicated that the seized funds were raised for the charitable purpose of relieving the need of people affected by the Syrian conflict.

Before and during the inquiry Trustee A was given multiple opportunities to account for the source and destination of the charitable fund including an order under section 52 of the act on the 3 February 2017 and a direction under section 47 of the act on the 8 November 2017. Trustee A did not respond to these documents. This is misconduct and/or mismanagement in the administration of the charitable fund by Trustee A. Trustee A also failed to respond to other correspondence from the Commission during the inquiry.

The Commission received information from the police under section 54 of the act, including photos of the scenes from which the seized funds were found, and details of Trustee A’s fundraising, which indicated that the seized funds were charitable.

Given the Commission’s view that the seized funds were charitable and that, despite opportunities to provide evidence that the funds were not, Trustee A did not do so, on 21 December 2018 the Commission made an order under section 85 of the act directing the police to apply, by means of a bank transfer, the seized funds equalling £7,691.92 to two charities that had objectives compatible to the charitable fund.

Trustee A’s involvement in and management of the charitable fund

During the compliance case Trustee A stated to the Commission that Team Syria, i.e. the charitable fund, had not carried out any activities and that it had not raised any charitable funds.

However evidence provided to the Commission by the police under section 54 of the act, gathered from Trustee A or his properties, indicated that this was not the case. Evidence included:

• meeting minutes, including those dated 26 January 2014, which referred to a meeting held in the name of the charitable fund and attended by Trustee A – the minutes discuss the charitable fund and make reference to a fundraising event advertised on the charitable fund’s website
• an undated ‘pledge form’ setting out donor names, addresses, contact numbers and pledge amounts totalling £15,400
• messages sent from Trustee A’s phone between November 2013 and February 2014 which showed Trustee A; appealing for charitable funds, authorising the expenditure of £3,000 of the charitable funds and requesting that photographs, with the charitable funds’ name, were taken as evidence of this expenditure

Accordingly, the inquiry identified that Trustee A’s account was not accurate, and that in fact Trustee A was in sole control of the charitable funds and their management, that the charitable fund had been active and that the funds raised were charitable.

Whether funds donated to and/or raised by the charitable fund have been properly applied and can be accounted for

Charity trustees have a number of legal duties. These include complying with their charity’s governing document, acting in the best interests of their charity, being able to account for the end use of their charity’s funds and applying their charity’s funds solely in furtherance of their charity’s purposes.

As noted above Trustee A has not provided sufficient information about the source and destination of the charitable fund despite multiple opportunities to do so. No evidence has been identified to demonstrate that any funds raised for the charitable fund were expended appropriately and for the purposes for which they were raised. Trustee A is therefore unwilling or unable to sufficiently account for funds raised by the charitable fund. This is evidence of misconduct and/or mismanagement by Trustee A.

Trustee A’s conduct and suitability to act as a trustee

Section 60 of the act makes it a criminal offence for a person to knowingly or recklessly provide the Commission with information which is false or misleading in a material particular. It is also an offence for a person to wilfully alter, suppress, conceal or destroy any document which the person is or is liable to be required to produce to the Commission under the act.

As noted in the section ‘Trustee A’s involvement in and management of the charitable fund’ above, the information Trustee A provided to the Commission was inaccurate and contradicted by information known to him and passed to the Commission by the police. This is evidence of misconduct by Trustee A.

Between 22 July 2013 and 14 October 2015 Trustee A was automatically disqualified from acting as a charity trustee or trustee for a charity under section 178(1) of the act. However, he continued to act as a trustee of the charitable funds whilst disqualified. This may be a criminal offence under section 183 of the act and is evidence of mismanagement and/or misconduct.

While the charitable funds’ website did not expressly describe itself as a charity, it clearly expressed charitable purposes meaning it would be reasonable for donors to believe that their funds would be charitable and used in furtherance of a charitable purpose, but no evidence has been provided that this was the case. This is evidence of misconduct and mismanagement by Trustee A.

The inquiry has established that in addition to raising funds for the charitable fund, Trustee A fundraised in the name of other charities without their knowledge or consent. No evidence has been provided about the end use of these funds. This is unacceptable conduct by Trustee A.

The Commission considers the failure to keep accounting records or provide sufficient evidence as to the end use of funds for the charitable fund is misconduct and/or mismanagement by Trustee A.

As set out above Trustee A repeatedly failed to respond to the Commission during the inquiry, including in response to a legal order and a direction. This is misconduct and/or mismanagement.

Due to the numerous concerns regarding Trustee A’s conduct and suitability and fitness to act as a trustee, on 14 June 2019 the Commission issued an order under section 181A of the act disqualifying Trustee A from acting as a trustee of a charity or charity trustee for a period of 7 years from the 26 July 2019. Trustee A is also now disqualified from holding any office or employment with senior management functions in a charity.

Conclusions

The Commission found that Trustee A had been responsible for misconduct and/or mismanagement in the administration of the charitable fund, primarily through his failure to fulfil his basic legal duties, including failing to keep accounting records or evidencing the end use of charitable funds raised or held in the name of Team Syria. The Commission also found that Trustee A has acted a trustee of the charitable fund between 22 July 2013 and 14 October 2015 while legally disqualified from doing so.

The account that Trustee A provided to the Commission in the course of the inquiry was contradicted by information shared with the Commission by the police, including information obtained by the police from Trustee A’s own records. This conduct undermines Trustee A’s honesty and integrity.

Trustee A’s attempts at soliciting funds in the name of charities that are unaware of his attempts at fundraising (or did not consent to such), as well as a failure to provide evidence as to the end use of funds raised for this purpose, is unacceptable conduct by Trustee A.

The Commission notes that Trustee A failed to fully co-operate with the inquiry throughout, as they are expected to. This is itself misconduct and/or mismanagement.

Regulatory action taken

During the course of the inquiry the following regulatory action was taken:

• a number of directions were made under sections 47(2)(a) and (b) of the act in order to gather information relevant to the inquiry
• on 21 August 2017 an order was made under s76(3)(d) of the act prohibiting the police from parting with the seized funds
• on 21 December 2018 an order was made under s85 order of the act to direct the redistribution of the funds to charities with objects compatible with those of the charitable fund
• on 7 May 2019 the Commission issued notice of its intention to disqualify Trustee A from trusteeship and senior management positions. No representations were received. On 14 June 2019 an order was made under s181A of the act disqualifying Trustee A from acting in the position as a charity trustee or trustee for a charity for 7 years. On 26 July 2019, Trustee A was entered on the Register of Removed trustees in accordance with s182 of the act

Issues for the wider sector

Funds raised for charitable purposes in England and Wales, even if they are not raised by a charity, fall within the Commission’s regulatory jurisdiction. People who manage and are responsible for appeals for charitable purposes (including those created by non-charitable organisations) hold the position of trustee and have the legal duties and responsibilities of trustee.

Trustees are under a legal duty to ensure that their charity’s funds are applied solely and reasonably in furtherance of its objects. They must also be able to demonstrate that this is the case. Section 130 of the act requires trustees to keep accounting records for their charity. Every charity’s accounting records must be sufficient to show and explain its transactions and disclose with reasonable accuracy its financial position. Therefore, in order to show that they are complying with their legal duties, trustees must keep records and an adequate audit trail to show that their charity’s money has been properly spent on furthering the charity’s purposes for the public benefit.

The Commission expects charity trustees to engage appropriately with the Commission as regulator and to co-operate fully when it is exercising its statutory powers. This is particularly relevant where the Commission has opened a statutory inquiry.

Members of the public should exercise care and caution when asked to donate to an individual soliciting funds and/or property with a representation that it is for charitable purposes where they are being asked to donate in person, on Twitter, Facebook or other social media. The Commission produces Safer Giving advice for the public on how to donate safely to support the work of registered charities.