Trustees at a Lancashire charity did not misappropriate funds but caused “worry and speculation” in their local community through poor governance, the Charity Commission has said.
To Inspire, formerly known as the Chaigley Trust, became subject to a regulatory compliance case following concerns about how proceeds from the sale of Chaigley Manor in the Ribble Valley had been used.
The sale raised £625,000 in 2001, and initially the money was placed in a trust fund, with only the annual interest being spent by the charity.
However, the charity agreed new objects with the Commission in 2009 which allowed it to provide recreational facilities. In 2011 it moved to Stephen Park in Gisburn Forest to operate an outdoor leisure and activity centre.
At this point, money from the property sale began to be used for the activity centre as well as the upkeep of Chaigley Manor. However, between 2012 and 2019 the charity failed to submit its annual accounts.
During the compliance case, the Commission found that this failure stemmed from “insufficient oversight of the charity’s finances” by the trustees. It also said that during the move to Stephen Park, trustees had “relied on information provided by an employee without any verification”.
The charity’s activities at Stephen Park were nevertheless in line with its objects, and the Commission found no evidence that funds were misused.
Commission forced to transfer funds to local charity
The charity effectively ceased operating in 2015 after the majority of the funds from the property sale were spent.
However, in 2019 the Commission had to issue advice and guidance to ensure remaining funds were applied correctly. These instructions were not followed and the regulator later had to use its powers to transfer £7,347 to another charity working in the area.
To Inspire has now been removed from the register.
Beneficiaries and locals “let down”
Tracy Howarth, assistant director of casework at the Charity Commission, said: “Unfortunately, the trustees failed to provide either the effective governance or financial oversight of their charity after they moved to Stephen Park. In doing so, the trustees let down their beneficiaries and people who cared about and supported the charity in the local area.
“This situation was made worse by the trustees’ failure to be transparent about how the charity’s funds were spent or communicate with the local community about its work after it moved to Stephen Park – leading to a considerable amount of worry and speculation in Hyndburn about what had happened.
“We hope other trustees consider this case carefully and take on board in particular the importance of continuing to communicate with the local community, even when a charity is experiencing difficulties.”