Religious charity gave £1.2m in informal grants to trustee's TV company

15 Nov 2019 News

An investigation by the Charity Commission into the church charity Christ Embassy has “uncovered numerous failings” in its management, including making grants totalling more than £1.5m without proper due diligence. 

The Commission’s inquiry has led to a new board of trustees being appointed, who have “strengthened the administration and management of the charity”.

Christ Embassy operates over 90 churches throughout the country and has a substantial domestic and international following. 

The investigation was initially opened following a number of concerns about the use of charitable funds on large connected-party payments.

Findings: Poor financial management and a lack of formal contracts 

Investigators found that a number of informal grants and payments were made, including over £1.2m to a broadcasting company, Loveworld Television Ministry, which was wholly owned by a trustee of the charity. 

The Commission also found that for a period of six years, the charity had allowed the broadcasting company free use of a £1.8m property it had purchased, and was subsidising a proportion of the company’s utility bills. 

Investigators found further grants to "partner organisations" comprising £118,995 Healing School, £186,616 to International School of Ministry, £10,000 to Christ Embassy Canada, £10,566 to Christ Embassy France, £37,216 to IPPC Conference and £77,266 to Rhapsody of Realities.

Documents demonstrated a lack of records and receipts to account for grants made, and there appeared to be little consideration given to whether the receiving parties had expended grants appropriately and for intended purposes, as was required by the charity's grantmaking policy.

Trustees admitted to the inquiry that “prior to the involvement of the Charity Commission, the grantmaking practice consisted of a discussion by the trustees at a trustee meeting regarding who should receive grants”.

Financial management at the charity was found to be “poor”. The trustees claimed that nine bank accounts held funds belonging to Christ Embassy Nigeria, and that three UK properties belonged to Christ Embassy Nigeria. However, the inquiry concluded that all of these in fact belonged to the charity.

The inquiry also found “a lack of formal contracts or appropriate record keeping”, and “a lack of evidence of proper decision-making or of conflicts of interest being appropriately managed”.

Interim manager appointment costs amounted to more than a million

The regulator temporarily froze the bank accounts to protect more than £600,000 of charitable funds.

The Commission also took action to remove two trustees of the charity, however the individuals resigned before the sanction was applied. An interim manager was appointed, who then instigated a full governance review.

The costs of the interim manager's appointment, including legal advice and fees, amounted to £1.2m excluding VAT. 

The cost was met out of the charity’s funds and included £390,000 of fees directly related to the work of the interim manager, and £854,000 in professional fees relating to work conducted by third parties. Additional work valued at £208,000 was undertaken by the interim manager on a pro bono basis.

‘People often put a lot of faith in religious charities’

Amy Spiller, head of investigations team at the Commission, said: “This was a complex inquiry that unveiled numerous failings by those running Christ Embassy over a number of years, which exposed the charity to undue risk. I am pleased that these issues have been resolved and that the new board of trustees has shown a clear commitment to move the charity forward responsibly.”

She added: “Charities are trusted in a way that is unique, and people often put a lot of faith in religious charities. It is therefore vital that trustees, particularly those with a large following, do all that they can to inspire public trust, so that they can help to uphold wider public confidence in charities.”

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