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My battle with the Charity Commission

Last September, Third Sector reported how Southwark Council had been forced to write off almost £70,000 awarded to a defunct drug and alcohol charity.

I was struck not only by the council’s lax checking procedures but by the fact that the federation had remained on the Charity Commission register until 2010, some eight years after it appeared to have closed. Wondering if this was just a one-off or if the case was indicative of wider problem, I placed a Freedom of Information request with the commission last September to find out just how many registered charities hadn’t filed their required documents for a significant period. (Late filing of accounts can be one of the first indicators that a charity has closed without informing the commission.)

A simple question – or so I thought. When the commission wrote back to me a month later, its answer was along the lines of ‘computer says no’. The commission said it did not currently hold such data and obtaining it would take considerable “time and effort”. The answer to my question, it added, could be found by “interrogating the individual entries” listed on the commission’s database of 161,000 registered charities.

We complained, but a commission spokeswoman justified the decision by saying that there wasn’t “currently the demand” for such information.

Then earlier this month – more than three months after the original request –  a breakthrough came. After we had repeatedly asked the commission to provide a statement stating why it, as the regulator, did not know how many charities had significantly overdue accounts, it finally ran a special search of its database. The search found that there were 873 charities with an income of more than £25,000 that had documents overdue by two years or more, and 2,789 that had documents more than six months late. Potentially, this means that there are hundreds, if not thousands, of defunct charities listed on its database that have yet to be removed.

There was a similar sequence of events when the commission was asked to explain why four particular charities remained on the register despite not operating for as long as eight years. Initially, it said that the charities were deemed too “high risk” to be removed. Then, one by one, three of the four charities in question were taken off the register as our investigation reached its conclusion. (One of the charities was pulled from the register only a matter of hours before we went to press.) On each occasion, the regulator said that the charities had been removed because it had received confirmation that they had “ceased to exist” – and declined to say whether their removal was in any way connected to our inquiries. The fourth remains registered pending the completion of its liquidation.

In my view this episode raises questions not only about the validity of a register that potentially contains hundreds of inactive charities, but also about the Charity Commission’s commitment to openness. The commission could have run a search of its database earlier but simply chose not to. One can only speculate as to why it eventually provided the information about the number of charities with overdue accounts, but one explanation could be that it thought it better to provide actual figures rather than offer a statement explaining why its expensive database was incapable of answering a fairly basic question.

David Robb, the recently appointed chief executive of the Office of the Scottish Charity Regulator, told Third Sector in an interview that he believed regulators need to “work well from the outside in, not from the inside out”. The Charity Commission should perhaps heed such advice and start looking at its practices from the perspective of the general public – and not from just from a regulatory ivory tower.

Read my analysis