A slapped wrist for charities

Just over a year ago I spent a pleasant afternoon visiting the Russell-Cotes Art Gallery and Museum in Bournemouth. At the time I had no idea I was under the roof of an organisation that was already in flagrant breach of Charity Commission filling requirements and indeed would go on to fall further from grace in the following year.

I know this now because the Charity Commission has issued a list of 12 charities which have failed to file annual documents for two years or more and have a last-known income of over £500,000.

It’s an intriguing list. Seven are faith-based organisations, which are perhaps following a higher authority, and three of them have Bournemouth Council as a trustee, which may provoke some revision of Bournemouth’s staid image.

How should we react to this list? Should we be appalled? The donors to these charities clearly aren’t. Several of the charities, when they last filed accounts, had a voluntary income of over £1m and one had over £8m.

Perhaps these organisations regard charitable registration as a hurdle they must leap to obtain tax-exempt status, but regard  the Commission as an organisation with which they do not need to trouble themselves in subsequent years. This is borne out by comments from Neville Brownlow, head of first contact at the Charity Commission who has admitted that some of the charities ‘basically, were not interested’ in complying with filing requirements, and that on pursuing them his department has received some ‘quite complacent responses’.

At this point, those of us who dutifully ensure that we file promptly each year may feel a sneaky respect for the miscreants. After all, what has happened to them as a result of their lax behaviour? Did they get into huge trouble when they broke the rules? Well ….not exactly. Half of the charities in question haven’t once filed on time in the last five years and, when they have filed, they are a year or two late rather than a couple of days. At least one of them has not filed an annual return in 5 years. So what has happened to them over the five years?

Have their donors headed for the hills? Have they been unable to claim Gift Aid? Apparently not. They have received a few emails and phone calls from Mr Brownlee’s office, and have now been put on a list. Gosh, I’m so happy that didn’t happen to us!

Oh and one charity has been taken off the list because they filed five years of annual returns and two sets of accounts last week, the oldest of which was more than four and a half years overdue. So that’s alright then.

It seems that the Charity Commission’s teeth are in a glass on its bedside table. Meanwhile, half of these organisations have registered companies with the same name and only one has been late filing to Companies House. Clearly Companies House are the big boys who command more respect.

If we want the Charity Commission to be an effective regulator then it needs to be provided with some proper sanctions to prevent us all from joining ‘the twelve’. A start might be fining late filers as Companies House does automatically.