Regulator closes Penny Appeal case following official warning 

21 Jun 2024 News

Penny Appeal logo

The Charity Commission has closed its case into Penny Appeal, having issued an official warning.

It said improvements have been made at the charity, after several years of engagement about a series of “weaknesses and shortcomings“ in the charity’s governance.

The Commission has now closed its regulatory compliance case into the charity, which was set up in 2008 to provide poverty relief, emergency aid and healthcare across Asia and Africa. 

This follows last week’s publication by the Fundraising Regulator, which found that three programmes run by the charity committed five breaches of its code of practice in total. 

Earlier this year, the Information Commissioner’s Office issued the charity with an enforcement order over its marketing activities.

The Commission opened a compliance case into Penny Appeal in June 2020 following several complaints and concerns raised about how the charity was being managed. 

Concerns included failure to manage perceived conflicts of interest, poor record keeping and inadequate management of major supplier contracts. 

The Commission now says it is satisfied that progress has been made to improve the charity’s governance and management, though there is still further work to do.  

Data filed with the regulator for the financial year ending 31 December 2022 puts the charity’s total income at more than £23m.

Official warning 

The Commission has now closed its case, setting out its expectation that the charity’s trustees act upon recommendations by all three bodies. 

It issued an official warning on 29 September 2023 after several meetings with the charity’s trustees and an inspection of the charity’s records and financial accounts. 

“It found that the charity failed to maintain proper trustee meeting minutes to record decisions in relation to the purchase of a property, consideration of an unsolicited offer received to buy a property as well as decisions around retaining and redeveloping a property,” a release from the Commission reads.

It also found that the charity failed to review a contract with its major supplier and manage a perceived conflict of interest relating to its relationship with its major supplier.  

‘A series of weaknesses and shortcomings’

Tracy Howarth, assistant director for casework at the Commission, said: “Improvements have been made at Penny Appeal after several years of engagement about a series of weaknesses and shortcomings in the charity’s governance.  

“This is a charity which receives significant support and donations from the public –  it is extremely important that its governance is fit for purpose.  

“The actions already taken have strengthened how the charity is run, and we are following up on the outstanding actions, which the trustees have assured us will be promptly addressed.”

The regulator said it has secured several improvements to the charity’s governance, including advising the trustees to appoint a minute taker and record conflicts of interest, which they have evidenced. 

It adds the trustees have set dates to review third-party contracts, and appointed an external consultant to review the charity’s existing contracts and advise it on best practice. 

The charity will also terminate its contract with the major supplier that caused a perceived conflict of interest. 

“The trustees have mainly complied with the actions required of them and the Commission notes and welcomes their commitment to complete the outstanding actions promptly,” its release adds.

Its trustees must also promptly complete an outstanding review of governance and contractual relationships and arrangements with third-party organisations established overseas, which forms part of an internal action plan set by the charity’s solicitors.   

Penny Appeal statement

A statement from Penny Appeal reads: “The decision by the Charity Commission to close its regulatory case into Penny Appeal today is testament to the huge strides we have made to strengthen our governance, processes and procedures.

“Under our expanded board of trustees and new leadership team, we remain fully committed to our journey of ongoing improvement as part of the extensive and independent governance review we commissioned.

“We look forward to continue working closely with our respective regulators to ensure Penny Appeal continues to put good governance first in everything we do in order to reach as many vulnerable families, communities and individuals in need as possible.”

For more news, interviews, opinion and analysis about charities and the voluntary sector, sign up to receive the free Civil Society daily news bulletin here.



More on