Lessons learned from the Captain Tom Foundation Statutory Inquiry

The object of this blog is to draw some useful and relevant lessons for charities, from the Charity Commission’s statutory inquiry into the Captain Tom  Foundation. Coverage of the many different matters investigated by the Commission can be found in all major media outlets, what we want to do is extract a few key points to help charities avoid similar problems.

Identify and manage conflicts of interest

Trustees must always act in the best interests of the charity. Conflicts of interest can lead to decisions which are not in the best interests of the charity. This can damage the charity’s reputation. In this case, poorly managed conflicts led to significant amounts of private benefit to two trustees. One of the major problems was that the unconflicted trustees had insufficient oversight and information to be able to identify and appropriately respond to conflicts, making it impossible for them to act in the best interests of the charity.

Trustees should not benefit from their position

It is a legal requirement that trustees and those connected to a trustee must not benefit from the charity in return for any service they provide to it. This rule extends to payments made to trustees providing services on behalf of the charity (i.e. not in their own time or on their own behalf). There are limited exceptions to this rule, which must be approved by unconflicted trustees. In this case, with so much of the charity’s intellectual property and activities (such as the online shop) owned by the family’s private companies, significant sums of charity money were paid to the trustees.

Protect intellectual property

On registration, the Captain Tom Foundation was advised to put in place agreements with the private family company that owned the Captain Tom trademark and other intellectual property. They failed to do this. Their informal agreement was so vague that the trustees were unsure whether they would be allowed to print a mug with Captain Tom’s name on without the family’s permission. The fact that the very name of the charity was owned by a private company meant that the charity could never really act independently in the best interests of their beneficiaries.

It is totally normal for celebrities to set up charities, using their name, and to maintain the intellectual property for themselves. However, what is crucial is that the public is given a very transparent understanding of when the brand is being used for private gain. Lack of clarity causes public mistrust and damages the reputation of the charity sector as a whole.

Conclusion

This case is an extreme example of serious and repeated instances of misconduct and/or mismanagement in the administration of the charity. Two trustees have been disqualified but the Captain Tom Foundation has not been closed by the Charity Commission. We hope that the memory of Captain Tom, who raised £38.9 million for the NHS at the age of 100, can continue raising funds for the causes close to his heart. I’ll leave you with his own words from his speech at the launch of his charity “I would like us all to stand shoulder to shoulder (metaphorically!).  Let’s try not to get downhearted, we will get through this, whatever is thrown at us and together we can ensure that tomorrow will be a good day.”

If you would like advice about conflicts, conflicts policies or trustee benefits, please contact Neil Burton [email protected]