The use of large up-front fees and disproportionate deposits has already resulted in significant cost consequences for one care provider.
The Grail Trust (“the Trust”) was set up in 1976 for the purposes of advancing religion and education and the relief of poverty. The Trust provided financial support to an overseas organisation that ran a children’s home and community outreach projects. An allegation of child abuse was reported at the children’s home and is still being investigated by the local authorities in the country.
The Charity Commission opened an inquiry into the Trust to investigate:
- how the trustees handled the allegation (including the reputational harm);
- whether the charity had adequate safeguarding policies and procedures that were properly implemented; and
- whether the trustees had adequately discharged their legal duties and responsibilities.
How to manage your partnerships with overseas charities
There are certain lessons to be learnt from the Grail Trust inquiry.
Trustees have a responsibility when funding or supporting overseas partners to assess the risks and ensure they have reasonable reassurance that the overseas partner is capable of delivering the proposed activities. This includes having appropriate systems of control in place, particularly where the overseas partner is working with children or vulnerable people.
In order to achieve this, trustees should conduct a thorough due diligence exercise that covers, as a minimum, an assessment of:
- each overseas partner, including its governance structure, composition of its trustee board (or equivalent) and financial standing;
- the projects being delivered by the partner, including the locations at which such projects are carried out, the intended beneficiaries and the suitability of staff or volunteers; and
- the safeguarding procedures put in place by the overseas partner to protect vulnerable beneficiaries.
Trustees should also ensure that they have robust monitoring procedures in place so that they can continue to assess the on-going suitability of the overseas partner and account for the funds and support being sent overseas. The appropriate level of monitoring will depend upon the extent and value of the support being provided.
Unfortunately, incidents and allegations can occur and the Charity Commission will not accept trustees pleading ignorance on how to handle such issues. Therefore, ensure that your charity has the following in place for times of emergency:
- an incident reporting process under which all members of staff and trustees are clear about when and how to report incidents and when these should be escalated to the relevant authorities and regulators;
- an allegation handling process under which all allegations are investigated promptly on an impartial basis by the appropriate people within your charity; and
- a clear policy on handling unwanted media attention, including the name of the person within your charity to whom media requests should be referred.
Serious incident reporting
The Grail Trust inquiry is a timely reminder about the role of serious incident reporting in charity governance.
The Charity Commission advises that where a very serious allegation is made against a charity, this should be reported to the Commission immediately.
In addition, trustees must always submit a serious incident report if there has been:
- an incident of abuse or mistreatment against a beneficiary by a trustee, member of staff, volunteer or someone else connected to your charity;
- an incident of abuse or mistreatment against a person in connection with the activities of your charity or personnel; or
- an allegation of abuse is made and you have grounds to suspect that such an incident may have occurred.
Whilst the Charity Commission has no regulatory authority over charities based overseas (where such charities are not registered with the Commission), its remit does include holding English and Welsh registered charities to account over the prudence and management of their relationships with overseas based partners. Don’t get caught out when working with overseas partners!
If you require assistance in relation to a governance review of your charity or similar services, please contact a member of our charities team on 0121 200 3242 or firstname.lastname@example.org. Article by Rebecca Ward.
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