Significant failures at Presidents Club, find charity regulators

13 Jul 2018 News

There were significant failures at the Presidents Club Charitable Trust, the Charity Commission has said following its investigation, which also ruled that the charity failed to safeguard women.

The Charity Commission and Fundraising Regulator last night published their own investigations into the Presidents Club. The charity came under fire over sexual harassment at is fundraising dinner following, which was exposed in an undercover report by the Financial Times. The charity went on to announce it would close. 

Both investigations found that the charity and its trustees were in breach of requirements. The Charity Commission said that the charity failed to protect the women at the event, while going to lengths to protect its guests.

The Charity Commission’s investigation said that evidence provided to it showed that the intent of the trustees was to raise “as much funds as possible” for the causes supported by the charity. It said that there “is no evidence to suggest that trustees acted in bad faith nor that they acted in anything other than what they believed to be the best interests of the charity”.

‘Fundamentally failed’

But it said that trustees were “clearly aware of the risks generated by holding an event of this nature”.

It said that trustees relied upon the success of the previous event, and “fundamentally failed” to adequately address the risk to the reputation of the charity “in relation to it being an all-male event with predominantly female event staff who had been issued with dresses purchased by the charity and with instructions on appearance”.

Considered less appropriate in ‘today’s world’

The regulator said that, by their own admission, the trustees “now accept the charity’s ‘model of fundraising may be considered less appropriate to a larger number of people in today’s world’ in contravention of their duty to not expose the charity to undue risk”.

The regulator said that trustees did not set out any clear procedures and policies as to how to deal with harassment or improper behaviour, which was in “stark contrast to the measures taken to protect the privacy of the guests”.

Event staff were “required to sign deeds of confidentiality, had their mobile phones taken away during the course of the event, and specifically instructed not to talk to anyone about the event”.

The trustees and agency organising the event told the regulator that this was “standard practice to protect any commercially sensitive discussions that may take place or philanthropic donations which guests wish to keep private”.

Trustees rebut allegations of harassment and assault

The Commission said it is important to set out that the “trustees and suppliers all rebut the allegations of harassment and assault set out in the media”. It said that it put out a call for evidence for individuals to come forward, but had not received any information to date.

But the regulator ruled that “trustees did not take sufficient steps to protect those coming into contact with the charity nor sufficiently investigate what happened following the allegations made about the event. Thereby not just failing to protect those who came into contact with the charity sufficiently but also to ensure the reputation of the charity was sufficiently protected.”

In the report from its investigation into the charity the Charity Commission said it is “reasonable and proportionate” to expect trustees who run a significant fundraising event with high profile attendees likely to attract social or media interest to have “ensured they were up to date with their legal duties and have applied them accordingly”.

It said that there was no bespoke written contract in place for the agency supplying event staff, and that there was not any detailed written instructions of specifications from trustees to either of their suppliers, both of which the regulator should be in place.

The regulator issued the charity with formal regulatory advice, and also agreed a regulatory action plan with trustees in order to gather in as much of the money raised at the event as possible.

It said that thereafter, the trustees, working with the Commission, will ensure that the charity is “wound up in an orderly manner and that remaining funds reach the causes for which they were intended”. 

It added that further events will no longer take place upon the winding up of the charity.

‘A warning to others’

Helen Stephenson, chief executive of the Charity Commission, said: “The allegations made about the event were entirely at odds with what we would expect from any charity when raising funds for such important causes. Our report should serve as a warning to others that raising funds for charity does not absolve trustees of their legal duties or moral responsibilities. Quite the reverse, the manner in which they are raised is just as important.

“The public expect the highest standards of conduct from registered charities. When a charity fails to meet those standards, it can risk the very reason it was set up in the first place.”

Stephenson added that the charity “demonstrated poor judgment, and a lack of awareness of the important legal duties and responsibilities the law places on trustees”.

President’s Club breached Fundraising Code

The Fundraising Regulator said its own investigation showed that the charity was in breach of the Code of Fundraising Practice and that it had failed to monitor activities of third party fundraisers.

The Fundraising Regulator said that the charity’s trustees had “little awareness of the expectations around fundraising, namely those outlined in the Code of Fundraising Practice”.

It said it saw no evidence that the charity intentionally ignored the code, but that it was “disappointed to see that the Presidents Club and its trustees had little awareness of the expectations around fundraising, namely those outlined in the Code of Fundraising Practice”.

It concluded that the charity “did not have a process in place to monitor the activities of the third party that organised and staffed the event” and that this was a breach of the code. 

Gerald Oppenheim, chief executive of the Fundraising Regulator, said: “The public has a right to expect that fundraising is conducted in a clear and transparent manner, meeting the highest ethical standards. This can be blurred when charities commission third parties, however it is the charity’s responsibility to ensure that these parties meet the Code of Fundraising Practice.”

The Institute of Fundraising said that it was “disappointing” that the charity’s trustees had “little awareness of the high standards that the fundraising profession holds itself to”.

Ceri Edwards, director of engagement and external afairs at the IoF, said: “We have been very clear that there is no place for this kind of behaviour in our sector. If we see it again we must call it out.”

Just ‘a slap on the wrist’

However, the Charity Commission has received criticism from some MPs for not going far enough in its report. Stella Creasy, Labour & Co-operative MP for Walthamstow, accused the regulator in a tweet of “trying to slip out their ruling” and “only giving those involved in running the Presidents Club a slap on the wrist”.

 

 

In an article in the Guardian, Liberal Democrat MP Jo Swinson, who headed the group of MPs that called on the regulator to investigate, said this did not go far enough.

She said: “The report is scathing about the trustees, yet disgracefully they are getting away with no more than a slap on the wrist. The Charity Commission should not be afraid to use its full powers and should disqualify these individuals from holding trusteeships until they can prove they are fit for the role.”

NPC 'disappointed'

Dan Corry, chief executive of think tank New Philanthropy Council, also said that the regulator did not go far enough in its investigation by not taking action against the charity's trustees.

He said: "We are disappointed to see that while the trustees were found to have failed in their legal duty, the Charity Commission is not taking any action against them. At a time when the Commission itself has identified public trust in charities as a key issue, we believe in a strong regulator for the sector. Trust should grow from the conduct of charities, but the public must also have confidence that a strong regulator will both protect and represent them".

 

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