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Charities and honesty

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This page deals with the sensitive issue of charities and honesty.

As well as dealing with honesty and dishonesty per se, we've included other (less serious) problems such as inefficiency and the unintentional breaking of rules.  In other words, we deal here with anything that hasn't been done 'properly'.

Much of the information below applies equally well to other organisations - in the public sector and the private sector.  Things can go wrong in any type of organisation and there's always a need for some ongoing scrutiny.

Charities are unusual in bringing out the best and worst in people :

The good news

We aren't intending to put people off charities.  Cases of charity fraud are comparatively rare.  Nevertheless, it pays to be aware of the problems.  For example see the page on scams, cons etc.

Credit cards (courtesy of freeimages.co.uk)

Reducing fraud:  Thankfully, there are various ways of reducing the chance of fraud, for example :

The bad news

Alas, a few charities do act improperly and there have been cases of fraud.

Misleading clothing collection leaflet

If we were dealing with charities in general, we might not devote a whole page to the question of honesty - because fraud (and related problems) aren't common.

However, we deal primarily with 'charitable' clothing collections.  This relatively minor aspect of charity fundraising is unique - it's riddled with misleading and/or fraudulent activities.  Surveys have shown that up to a half of 'charitable' clothing collections are misleading or bogus.  For example see headington.org.uk.

We've split the issue of 'problems with charities' into two categories :

'Pretend' (bogus) charities

These are individuals or organisations which are not registered as charities.  They're potentially bogus, pretending to be charities (or similar good causes).  They range from :

With these scams, the proceeds appear to go to a genuine good cause, but most or all of them disappear into the pockets of the people concerned.  Often it's criminal deception/fraud, plain-and-simple.

This is a particular problem with clothing collections - some commercial clothing collectors distribute collection leaflets/bags which give the misleading impression that they're helping a charitable cause.  Some even use the name of a charity.

Genuine charities

By 'genuine' we mean an organisation which has been vetted by the Charity Commission, formally registered by them as a charity, and given a 'registered charity number'.

Thankfully, most registered charities behave properly.

Nevertheless, there have been problems with some registered charities.

We've divided the problems into the following four categories, in increasing order of seriousness :

An example

It can be crucial to understand the differences between the four categories of "problems" outlined in the bullets above.

The following is an example of this.  A small registered charity had an informal arrangement with a self-employed commercial clothing collector.  Under this arrangement, the collector used the charity's name, logo etc on his leaflets, and in return he undertook to donate an agreed sum to them every month.  However, the clothes were being collected without a licence - a criminal offence.

The Charity Commission investigated and came to two conclusions :

After this, the charity maintained that they had "done nothing wrong" and had been "cleared" by the Charity Commission.  The charity said that the investigation had been unnecessary and a waste of time.  In this case it all depends on the semantics of what you mean by "doing something wrong".  The charity had broken the law in several ways, albeit unintentionally.  Sadly, in the end it emerged that, although the collector had been using the charity's name for several months, he never paid any money to the charity.

Safeguards - charity law and the Charity Commission

Notes and coins (courtesy of freeimages.co.uk)

There are various safeguards built into charity law designed to reduce or eliminate fraud - eg rules on trustees, conflict of interest, the keeping of accounts and annual auditing.

Furthermore, the Charity Commission has compiled codes of practice to encourage integrity.  For instance one simple recommendation they make is that charities should try to ensure that at least two people are present whenever incoming post is opened (bearing in mind that envelopes sometimes contain cash donations).

Charity Commission logo

The Charity Commission has strong powers to deal with any improper behaviour by a charity.  Sometimes the Commission intervenes pro-actively.  On other occasions they act because of concerns brought to their attention by third parties, such as other regulators, the media or members of the public.  The Commission then conducts an inquiry and produces a report.  The charity may be cleared of any wrongdoing, or may be advised/instructed to take certain actions.  In extreme cases, the assets of a charity can be frozen and the charity can even be wound up.  This happened with the charity called "Humana".

Question mark symbol

You can check whether a charity is genuine by looking it up on the Charity Commission website (or by telephoning the Commission).

Related pages

See also the following pages :