Press Release

Commission ensures charity recovers political donation

5 September, 2008
 
The Charity Commission, the independent regulator and registrar of charities in England and Wales, has overseen the return of a donation of charitable money made by the charity Catz Club (known as Schoolfriendetc.) to a political party, in breach of charity rules.
 
On 29 August 2008, the Commission received a complaint from a Member of Parliament about a £7,500 donation the charity had apparently made to the Labour Party. The Electoral Commission’s register confirmed that the donation had been made, despite the fact that a charity cannot make political donations or give other financial support to a political party.
 
Given the seriousness of this issue, the Commission contacted the charity as a priority, set out the legal position, and ensured that the trustees of the charity acted immediately to recover the donation. Within three working days, the charity had secured the return of the donation from the Labour Party. The trustees have also undertaken to ensure that proper safeguards are put in place to prevent this from happening again.
 
Given the public interest in this case, and the wider issues that the Commission can highlight for other charities, the Commission has also published a regulatory case report on this matter.
 
Andrew Hind, Chief Executive of the Charity Commission, said:
 
“Donations to political parties are absolutely prohibited for charities, so this was of serious concern to us. That’s why resolving the issue was a priority, and the charity confirmed the money would be returned to it within days of the concern first being raised. This is a good result for the charity, and means we don’t have to look at the question of liability – in a similar situation, if an inappropriate donation was not returned, we would require the trustees to personally repay the misapplied funds so as to ensure that the charity doesn’t lose out.
 
“We also think that it’s in the public interest to explain why this was such a serious matter for us, which is why we’ve also published the regulatory case report.”
 
The regulatory case report on Catz Club is available from the Commission’s website at http://www.charitycommission.gov.uk/investigations/inquiryreports/inqreps.asp.