Models, mermaids, mismanagement and the Ingram-Moores

Insight

28.11.2024

Charity trustees are role models. Their leadership sets the tone for the culture and values of the charities they serve and is critical to their effective operation. If trustees fail to meet the standards expected of them, not only can they damage confidence in their charity, but they can even harm beneficiaries and stakeholders. This article looks at lessons to be learnt from the Charity Commission’s recently reported high-profile investigations into three charities where misconduct and/or mismanagement were found: Fashion for Relief (FFR), Mermaids and the Captain Tom Foundation (CTF).

FFR was a grant-making charity founded by Naomi Campbell. Its aims included relieving poverty and advancing health and education. The charity ran spectacular fundraising events, but was found to have been poorly governed and financially mismanaged. The litany of governance failings uncovered included unauthorised payments to a trustee, inappropriate banking arrangements, lack of financial controls and unreasonable fundraising expenditure. Indeed, between April 2016 and July 2022, charitable grants made up only 8.5% of FFR’s overall expenditure. FFR also failed to manage its partnerships appropriately, with charities such as Save the Children and the Mayor’s Fund for London raising concerns that they were not paid money promised from FFR events. The instances of misconduct and/or mismanagement were so significant that all FFRs trustees were disqualified for several years.

Mermaids seeks to relieve the mental and emotional stress of children and young people affected by gender identity issues, and their families, and to advance education in this area. The Commission opened a compliance case following negative press coverage and public complaints about the charity. Issues raised included the provision of chest-binders, and advice allegedly given about puberty blockers. The Commission opened a formal inquiry after an Equality, Diversity and Inclusion (ED&I) review commissioned by Mermaids highlighted additional issues about its culture, management and processes While not all concerns were upheld, the inquiry made some findings of mismanagement, noting that Mermaids had grown rapidly in a short period of time and failed to adapt its management and administration accordingly. The Commission issued regulatory advice and guidance to the charity, which has since been actively working to address the concerns raised.

CTF was established in the name of the late Captain Sir Tom Moore, the World War Two veteran who achieved international renown for raising £39million for NHS charities during the COVID-19 pandemic. The Commission’s inquiry found multiple instances of serious misconduct and mismanagement by Captain Tom’s daughter and son-in-law (Hannah and Colin Ingram-Moore). Mrs Ingram-Moore was a former trustee and CEO of CTF, while Mr Ingram-Moore was a former trustee.

The Commission’s highly critical report revealed a “pattern of behaviour” whereby Mr and Mrs Ingram-Moore benefitted personally from their involvement with the charity. Repeated failures to manage conflicts of interest that arose from their familial links and CTF’s links to their private companies led to direct and indirect private benefit for their family. The inquiry also concluded that the Ingram-Moores had damaged public trust in charities by giving the misleading impression that CTF would benefit from the sales of Captain Sir Tom’s books (the charity did not receive a penny from Tomorrow Will Be a Good Day, Captain Tom’s Life Lessons or One Hundred Steps, despite the Ingram-Moores being invited twice by the Commission to rectify the position). CTF’s other, unconflicted trustees were also criticised for not always having sufficient oversight and control of the charity’s administration. It was, however, recognised that their ability to manage conflicts of interest was hampered by the Ingram-Moores’ failure to inform them of potential conflicts as they arose.

These inquiry reports emphasise that, as leaders of charities, trustees are respected and powerful: their words and actions matter to their charities and to wider society (whether or not they also happen to be supermodels). As ever, great power comes with great responsibility: if a trustee’s behaviour falls below the expected standard, it risks damaging public trust and confidence not only in the trustee, but also in the charity and the sector as a whole.

The reports raise points that trustees may usefully learn from in evaluating existing governance arrangements and in identifying improvements:

Be “object” driven: Every charity exists to further the charitable purposes set out in its objects. For each charitable activity carried out, trustees should understand, and be able to show, which object the activity furthers.
All trustees are equally responsible: Trustees are collectively responsible for the management and administration of their charity. They should not just ‘go with the flow’ or defer to the most involved person on the board: trustees are jointly and severally liable for the decisions they make and share responsibility for getting things right.
Recognise and manage conflicts of interest: Trustees must always act in the best interest of their charity. They must be alive to, and manage, any situation where their personal interests or loyalties (including to another person or organisation) could, or could be seen to, prevent them from acting only in the charity’s best interests. The Charity Commission’s CEO, David Holdsworth, neatly summed this up in his comments on the CTF inquiry: “[t]he public – and the law – rightly expect those involved in charities to make an unambiguous distinction between their personal interests, and those of the charity and beneficiaries they are there to serve”.
Submit your filings on time: Trustees commit a criminal offence if they fail to ensure that their charity’s annual updates, returns, accounts and reports are submitted to the Commission on time. While this is not strictly enforced, failing to make filings is likely to constitute misconduct in most cases and may have other ramifications (such as making it more difficult to secure funding from trusts and foundations).
Ensure trustee benefits are authorised and reasonable: Trustees can only receive benefits from their charity if authorised to do so, usually by the charity’s governing documents, a statutory power or the Charity Commission. Before a trustee – or a person connected to them – is provided with a benefit (such as being paid for providing a service), the power to authorise that benefit should be confirmed and properly exercised, including carefully managing the conflict of interest that arises. It should also be clear that the benefit is a cost-effective and appropriate use of the charity’s resources.
Protect your resources: A charity’s assets and funds must only be used to further its charitable purposes, in accordance with the terms of its governing document, the law and contractual obligations. Trustees should ensure that proper financial and administrative controls are in place and records are kept, to maintain clear lines of responsibility and management, and protect the charity’s property.
Work in context: Trustees should be aware of their legal duties as charity trustees and act in accordance with them. They must also consider the wider legislative landscape, regulation and guidance that is relevant to their charity’s operations. For instance, trustees will often need to ensure that their charity complies with data protection rules. Trustees also need to stay abreast of developments in the field in which the charity operates, particularly when providing advice to beneficiaries. A point raised in the Mermaids inquiry was that trustees of charities that work with children and young people questioning their gender identity or experiencing gender dysphoria should take the findings, conclusions and recommendations of the Cass Review into account, and review their charity’s outputs in light of them. They should also keep up to date with future changes to guidance or legislation.
Don’t let growth run away with you: Trustees want their charities to go from strength to strength, but it is important that growth is well-managed and charities scale up effectively. Trustees should ensure that the pace of growth does not outstrip the charity’s infrastructure or management, and tailored policies should be introduced to address risks faced by the charity. These policies should be regularly reviewed to confirm that they remain fit for purpose as the organisation grows.
Set an effective workplace culture: Trustees should lead by example, committing to values and behaviours that reflect good practice for everyone in their organisation. They should make it clear that poor behaviour will not be tolerated and put policies in place to ensure that it is deterred, investigated and addressed appropriately. Staff should be encouraged and empowered to raise concerns and challenge poor behaviour if it arises.
Help people complain: While uncomfortable to receive, complaints can help charities to nip problems in the bud and take steps to improve their services. Trustees should ensure that their charity has a clear complaints policy covering how to make a complaint, the types of complaints that the charity will engage with and the process by which they will be addressed.
Don’t cover up your mistakes: While it can be tempting for trustees to focus on avoiding critical coverage about their charity, the Commission warns that this will not necessarily protect the charity’s reputation. Rather than trying to cover up problems, trustees should acknowledge issues and learn from them with appropriate transparency. Acting with integrity when problems arise can build trust and reduce the risk of issues reoccurring.

This publication is a general summary of the law as at the date of publication. It should not replace legal advice tailored to your specific circumstances.