The Charity Tribunal has upheld a decision to remove the 1Click Charitable Trust from the register of charities because it did not “pursue charitable activity”. 

1Click Charitable Trust was set up in 2010 and removed by the Charity Commission on 1 February 2016. But the trustees appealed to the Charity Tribunal, which has now ruled in the Commission’s favour. 

The case sets a precedent to enable the Commission to easily remove charities with no evidence of charitable activity. The Commission has indicated that it will use this case to inform its future approach. 

On its website the 1Click trust says it was “established to research and develop systems to enable the elderly to take advantage of the technological age”. It intended to develop technology to enable users to order repeat prescriptions, access to online shopping, and link them to local social services. 

The Commission became aware of the charity because it was involved in a business rates disputes, which has now been resolved, but continued to make inquiries about its income and activities. 

During its time on the register the charity said it expected to have an annual income of around £600,000 from European Union grants. However its highest annual income was £3,751 and for three years it was less than £5. 

Decision to remove the charity 

The Commission wrote to the 1Click Charitable Trust in December 2015 to tell it that it would be removed from the register because “charitable activity has been negligible since registration”. 

“We have taken this view in the absence of any sufficient level of charitable activity,” the Commission said,  “and any real evidence of visible means of income (or the ability to generate such income) to allow sufficient levels of charitable activity to meet the public benefit test.”

1Click sought and was granted an extension but did not respond so the Commission removed it from the register on 1 February 2016. 

It then appealed the removal, saying the Commission should have asked why there was no response and that the removing the charity was unreasonable. 

Unsuccessful in raising funds 

Stephen Flanagan, one of the founding trustees of the charity, provided a witness statement to the tribunal stating that the charity had been unsuccessful in securing funding for its project. 

He told the tribunal that: “Instead of congratulating the appellant for continuing to act in a good and proper manner it decided to strike it off the register of charities on the spurious basis that it should never have been registered in the first place as it had no income”.

Robert Davies, the Commission case worker, told the Tribunal that the charity had made only one grant since its inception, which was to a friend of the trustees. In his witness statement he said: “The Trust had not provided the Commission with sufficient evidence that it was operating or of its ability to generate sufficient income to operate as a charity in the foreseeable future.”

He also said the charity told the Commission that it had established a public house as a trading subsidiary and expect this to transfer £50,000 to the charity by the end of the year. The Commission’s analysis of the subsidiaries finances suggested that it would generate a surplus of around £2,000.

Davies also told the Tribunal that: 

• the charity has not so far solicited any funds from the public but had a friend in Malaysia ready to conduct research and development of the proposed electronic device once  £100,000 is in place to fund it;
• that the trustees planned to initiate a new trading venture of running a backpackers’ hostel; 
• that two members of staff had stolen money from the charity;
• that the same two trustees were signatories to both the charity’s bank account and that of the trading subsidiary; 
• that the charity had paid the travel expenses of an Italian builder who had worked on the pub building; that the trading subsidiary 10 had a “tenancy at will” of the pub building and that two trustees lived there rent-free; 
• there were no minutes of trustee meetings as they did not meet face to face. One of the trustees lives in Italy and is quadriplegic, so decisions are taken by Mr Flanagan ringing up the trustee’s daughter and asking her speak to her mother.

Late filing 

The organisation is also late filing its 2015 annual accounts with Companies House. 

Its accounts for the year ending December 2014 show it had an income of £2 and that it spent £1,580. £250 on grants, £477 on generating voluntary income and £853 on professional fees. 

It had assets of £1,000 and debts of £5,000. 

Tribunal’s conclusion 

The tribunal concluded that the Commission was correct to remove it from the register, because “we consider that the trustees adopted an insufficiently business-like approach to the running of this charity and that this would in turn have hampered its ability to raise funds”.

But the court noted that low income was not a reason by itself to remove a charity. 

“To be clear, we do not understand the respondent to have removed this charity from the register against its wishes on the basis that it did not meet the registration threshold and we have not, accordingly, approached the appeal on that basis,” the Tribunal decision said.

‘Accurate up-to-date register is vital’ 

The Charity Commission said it was pleased with the tribunal’s decision and said this will inform the Commission’s future approach.  

David Holdsworth, chief operating officer, said: ““The public have a clear interest in knowing what organisations are charities and what organisations no longer operate.

The Commission in promoting public trust and confidence in charities may remove charities from the Register of Charities if they are merely performing administrative functions with no reasonable prospect of further charitable activity.”

Kenneth Dibble, legal director, said: “This case shows the approach the Tribunal will take when dealing with appeals against the Commission’s decisions to remove non-operating charities from the Register. We will adopt a robust approach in removing these charities where they have minimal assets and are making no significant attempts to further charitable purposes.”

‘Foregone conclusion’ 

Flanagan told Civil Society News that he felt the case was a “foregone conclusion”.

“There seemed to be a slim chance the Tribunal Judge would side with us even though I believe that there is room in the world of charities for smaller charities,” he said.