In response to accusations of failure by charity sector umbrella bodies, the Charity Commission has released an updated statement in relation to its handling of the Cup Trust.

The full story is available by clicking here, and the Commission's updated statement is below:

“The Commission understands that the Times article about the Cup Trust has caused serious concern, not just among members of the public who give so generously to charities, but also among the many thousands of charities that demonstrate high standards of probity, ethics and governance and do so much to support vulnerable people in society.  

"We are not comfortable with the charity’s set up. We recognise that for a charitable structure to be used in this way damages public trust and confidence in the sector and serves to undermine the excellent work of charities. As regulator, we have a responsibility to uphold trust and confidence in charities.

"It was precisely because we had serious concerns about the charity’s structure and activity that we investigated the Cup Trust. We opened an investigation into the charity in March 2010 following concerns raised about its governance, its activities and how its funds were raised and applied. We seriously considered whether or not it was a charity and whether it should be removed from the register. But whatever the motives for creating the Cup Trust, we were forced to conclude that we could not remove it, as the Cup Trust is legally structured as a charity. This view was confirmed by independent legal advice. For that reason, despite our concerns, we closed our investigation in March 2012, with regulatory advice and guidance, knowing that we might intervene again.

"We cannot take action against a charity unless we are able to demonstrate that its trustees have breached their legal duties. Nor can we take action against a charity simply on the basis that it spends a relatively small proportion of its income on charitable activities in any given year.  It is acceptable under charity law to invest in a fundraising scheme and to plan expenditure over a number of years. It is for trustees to decide how to apply their charities’ funds. Most trustees make these decisions well and in the best interests of their beneficiaries. 

"It is important to stress that the Cup Trust is a highly unusual structure and operation. It is also important to note that it remains to be seen whether the charity’ gift aid claims will prove successful. Decisions about awarding tax relief to charities are for HMRC. We have no remit over tax issues, and cannot comment on HMRC’s activities or decisions. 

"We would like to reassure charities and the public that we take the deliberate abuse of charity extremely seriously and would encourage anyone who has any evidence of abuse, concerning this or any other charity, to share that evidence with us.”

 
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