A Conservative MP and trustee of WE Charity UK has described the closure of the charity's Canadian counterpart, amid concerns about links to politicians, as “unfortunate”.
Last week WE Charity Canada announced it will close, after months of scrutiny over its links to senior politicians, including the prime minister, Justin Trudeau.
WE Charity UK has stressed that it is a separate entity, but the scandal has nevertheless led the charity to reevaluate what it expects to achieve, and it has been in touch with the Charity Commission and key stakeholders to update them on a new strategy.
The charity, which is chaired by Liberal Democrat peer Lord Rumi and counts Pauline Latham, a Conservative MP, among its trustees, works with schools and aims to help young people get involved in their communities and organise citizenship projects.
The charity also hosts an annual event involving high-profile speakers and performers, WE Day, to inspire young activists.
In the UK its income for the year to 31 August 2019 was just over £5m, including £360,000 from government grants.
WE Charity Canada scandal
The Canadian charity had been chosen to run the government’s Canada Student Service Grant, a summer volunteer programme, which was claimed to be worth up to C$900m (£519m). The charity was founded by two brothers 25 years ago. It ran education projects and hosted motivational events featuring celebrity speakers.
It emerged that Trudeau’s mother and brother had been paid to speak at events run by the charity over a number of years. Trudeau has denied giving the charity preferential treatment.
Former finance minister, Bill Morneau, also had family links to the charity and had benefited from travel paid for by the charity. One of his daughters also worked for the charity.
Critics had been concerned about the way Canadian government awarding a large contract to a private organisation with links to senior politicians. The government said other charities were considered to run the programme.
The contract was cancelled by mutual agreement earlier in the summer. Last week WE Charity Canada announced it would wind down and set up an endowment to continue its international projects.
Craig Kielburger, co-founder, said: “Our founding principle has been that every decision we make is through the lens of what is best for children. Through decisive action to preserve our savings, sell our assets, and establish an endowment, we hope to sustain global projects for the long-term, like our hospital, college and agricultural learning centre that meet critical needs of children and families.”
The charity's statement added: “Covid-19 significantly disrupted WE Charity programming. The fallout from the Canada Student Service Grant has placed the charity in the middle of political battles and misinformation that a charity is ill-equipped to fight.”
UK charity impacted by ‘unfortunate’ events in Canada
Latham told Civil Society News: “The events in Canada relating to WE charity have been very unfortunate. WE Charity has done incredible work over many years across the globe.”
But she emphasised that the UK charity “continues to operate as a separate entity”.
She said that the charity had already taken action to “simplify” its offer due to the pandemic and plans to scaled down operation.
“In order to quickly adapt to the Covid-19 pandemic, WE Charity UK made the decision to simplify its programming.
“It decided to cancel its WE-Day format which are no longer feasible. It also decided to move its WE schools programming to a digital-only format.”
However, the UK charity has seen an additional impact related to the closure of the Canadian charity.
Latham said: “The unfortunate events in Canada, which are not related to the UK, have meant a reduction in funding as many of our funders are global partners.”
She added that trustees are “in constant touch” with funders and partners, including the Greater London Authority.
It has also been in touch with the Charity Commission to “inform them of our new strategy”.
She said that overall the UK charity “continues to be in a good financial position and it will review its strategy on an on-going basis in light of the pandemic”.
The Charity Commission confirmed it was in touch with the trustees.
A spokesperson said: “We are aware of the issues related to WE Charity in Canada. Its counterpart UK charity Free the Children UK (1138645) has done the right thing by contacting the Commission on this issue.
“Any decision about the UK charity and how it responds to this matter is for the trustees. However, we have issued the charity with advice and guidance to support their decision-making.”
Financial links between two charities
The UK charity's most recent accounts, for the year ending August 2019, show money flowing between it and the Canadian charity.
They say that during “the period the charity made grants totalling £1,160,600 to WE Charity (Canada) but also that “WE Charity (Canada) provided unrestricted donations to the Charity in the amount of £807,964 during the period”.
Later they report a that the WE Day UK fund has a “negative balance of £251,035 due to losses incurred for WE Day 2018 event. However, this deficit will be covered by future income which has already been secured from WE Charity Canada as part of ongoing support for this annual event.”