Lessons to be learnt from the Dove Trust

22 Jul 2013 Voices

The Dove Trust, which owns suspended donation site CharityGiving, got into difficulty after giving its trustee a loan. Moira Protani looks at where the charity's board went wrong, and how they could have got it right.

Moira Protani, partner, Wilsons Solicitors

The Dove Trust, which owns suspended donation site CharityGiving, got into difficulty after giving its trustee a loan. Moira Protani looks at where the charity's board went wrong, and how they could have got it right. 

The Charity Commission has appointed an interim manager to the Dove Trust which is a registered charity.  The Commission was concerned at the very late filing of the annual report and accounts for this charity.

The charity was founded by a Mr Colman, who was formerly an accountant.  The charity has general charitable purposes and through a portal on its CharityGiving website it claimed to facilitate charitable giving by members of the public who expected the funds donated to be given to their chosen charity after gift aid had been

The public may have thought that this was a safe way to give money to their chosen charities - especially as Bryan Gunn a well-known footballer who used to play for Norwich City football club had launched an appeal for funds in memory of his two year old daughter funds for cancer research which was administered by the Dove Trust. 

However, this wasn't the case because Mr Colman had financial difficulties and using his position as a trustee, it would seem that he agreed on behalf of the charity to make an unsecured loan of £200,000 to his business which used it to buy a property with repayment dependent upon the sale proceeds of that or another property. 

In the event the sale proceeds were insufficient to repay the charity. A large sum of money is missing from the charity's funds and therefore some of the funds donated by the public may not be recovered and their chosen recipient charity will be out of pocket. Mr Colman also charged the charity rent for occupying his premises.

One can only speculate at this stage on how shambolic the governance arrangements for this charity must have been!  However, the trustees of this charity should not have allowed Mr Colman to take any part in their decisions involving contractual arrangements with his business and, as a minimum one would expect that:

  • the funds donated by the public should have been ring fenced in trust for the intended charity recipients
  • the trustees should have been independently advised on whether any form of loan was a good investment for their charitable funds
  • the Charity Commission's prior consent by way of an order should have been obtained for the loan to Mr Colman's business
  • the trustees should have had independent legal advice on the risk of loss and how the loan could have been secured on the property

Moira Protani is a partner at Wilsons Solicitors LLP