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Garfield Weston Foundation censured for links to political donations

Governance | Gareth Jones | 1 Apr 2010

Trustees of the Garfield Weston Foundation (GWF) have been reprimanded by the Charity Commission for allowing an associated company to make political donations to the Conservative Party.

The Commission launched an investigation after Charity Finance revealed in July last year that Wittington Investments Limited (WIL), a company which is 79.2 per cent owned by the Foundation, had made donations totalling £800,000 between 1993 and 1999 and another of £100,000 in 2004.

Between 2001 and 2007 it also made five and six-figure donations to the European Foundation, the Centre for Policy Studies and the Labour Euro-Safeguards Campaign, all of which have political links.

The Commission found that shareholders, and thus the charity, had not been consulted on the donations “due to an oversight”.

It ruled that “trustees of a charity which owns a controlling interest in a company have a duty to the charity to exercise that control so as to safeguard the interests of the charity”, and should therefore have considered the donations.

It found that prior to 2006 the trustees of the charity who were also directors of WIL had breached their duties by failing to raise the issue with their fellow trustees.

In 2006 the trustees passed a resolution allowing WIL to make EU political donations without the charity’s consideration, a decision the Commission also deemed a breach of their duties.

The donation made to the Conservative Party in 2005 was later reimbursed. The Commission has decided against seeking restitution from the trustees for the other payments.

Trustees "acted in good faith"

In a statement, the Foundation stressed its political independence.

“Trustees of any charity have a duty to maximise the returns on its investments so that these returns can be used for charitable purposes.

“To the extent that political donations commercially benefitted the business of WIL and its subsidiaries, they indirectly benefited GWF in terms of protecting the value of its investment and enhancing its income return.

“For this reason the trustees of GWF felt it appropriate to give their approval, as shareholders in WIL, to a general (but limited) authority for WIL to make such donations when required.

“At no point did the trustees consider these as effectively donations by the charity itself.

“The Charity Commission acknowledges that the trustees acted in good faith in respect of the donations made by WIL.”
 

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