The lessons to be learned from the sullied legacy of Captain Tom
The Charity Commission’s long-awaited report following its inquiry has found that Captain Sir Tom Moore’s daughter and son-in-law benefitted privately from funds that were intended for a charity set up in his name. In April 2020, their private firm, Club Nook, received an advance of £1.47 million for Captain Sir Tom’s three-book deal. Despite repeated assertions that part of the advance would be used to set up and fund the Captain Tom Foundation, the charity has not received any money to date, leading to a tirade of public criticism.
Captain Sir Tom is widely thought of as a hero for his charitable efforts during the Covid 19 pandemic, so for his family to betray people’s goodwill for their own benefit has only fuelled the public backlash. This case was quickly followed by the story of a woman in Scotland who embezzled funds from her friend’s cancer charity set up in memory of her daughter, further damaging public trust in charities.
As shocking as these two stories are, they are not the norm. There are over 170,000 registered charities in the UK, the vast majority of which are honest organisations with genuine intent to better the cause they support. These two instances are truly an exception.
The case of the Ingram-Moores has, however, cast the spotlight on the role of trustees, how charities manage their finances and the risks associated with a lack of accountability and transparency. In light of this, it’s worth reflecting on what these risks are, how charities can avoid them from the outset and instead create a transparent and accountable culture.
The greatest risks to a charity caught in a scandal are reputational. Painstakingly hard to build, and incredibly easy to destroy, a charity’s reputation is its greatest asset. Once a charity’s name has been tarnished, no one wants to be associated with it, halting the flow of donations and good publicity, which is what all charitable organisations rely on to survive.
Sometimes, where charities are involved in a scandal, changing a name may be a possibility but, in the case of the Ingram-Moores, the damage is irreparable because of the reliance on the connection with Captain Sir Tom’s personal name and reputation.
Irreparable damage
Financial scandals also carry legal risks. Previously, these matters would have been fully dealt with by the Charity Commission through a restitution order. This order, made by the Commission, would name the individual in question and demand that they repay the funds. Nowadays, the Commission carries out the initial investigation before handing the responsibility over to the charity trustees to pursue the repayment of the stolen funds.
The disadvantages of this approach are that the Commission is relying on appealing to people’s “better judgment”, which can be wishful thinking, and pursuing a claim for repayment of charitable funds can be bureaucratic and challenging for charity trustees to pursue.
It’s clear that prevention is better than cure when it comes to promoting accountability and transparency surrounding a charity’s finances. As the Ingram-Moores found out, when things do go wrong, there can be catastrophic consequences. Making sure processes are designed correctly from the beginning will ensure that a culture of transparency and accountability becomes entrenched as soon as the organisation becomes operational. The Charity Commission has lots of clear, accessible guidance on this subject for people who are interested in setting up a charity.
Charities themselves should ensure that they consult experts with a wealth of experience in the sector. Unlike businesses, charities have many regulations unique to the sector that set them apart. Often, when a charity gets it wrong with its finances, it’s because the management didn’t fully understand the nuances of charity regulations at the outset. Misunderstandings so early on will flow through to the way in which the charity’s finances are managed, such as not filing accounts on time to the point where they’re overdue and/or inappropriate practices are taking place.
Diversity of opinion
Choosing trustees is another instrumental part of setting up a charity. When considering who to make a trustee, it’s advisable to ensure there is a diversity of opinion, backgrounds and ideas. A common mistake is to rely on accountants or lawyers, and while this is not bad experience to have, the position of a charity trustee is an unpaid volunteer and therefore a passion for the charitable cause is arguably more important.
A successful board of trustees is much more about personality than credentials. When a charity is just starting out, it’s best to begin with a small board, adding on layers of experience as the charity establishes itself and grows. In the case of the Ingram-Moores, there was a lack of diversity of opinion, meaning the trustees were able to be influenced and the decisions made were not challenged.
There are certain high risk areas for charities to navigate when it comes to managing finances, the origins of which lie in the motives behind setting up the organisation in the first place. Charity is all about public, not private, benefit, so conversations about founding a charity should all revolve around the impact the organisation wants to make on the community. Alarm bells should be ringing if the conversation is more about the founder than the cause.
To safeguard against these high risk areas, charities must be transparent about how they apply the money they receive. Charities’ operations are cyclical, following a typical pattern of funds being donated, applied, then demonstrating what is being done with the funds, ideally prompting more people to donate. The key to cultivating greater transparency around finances lies in the third part of the cycle: showing the positive impact of the fundraising.
The charity sector would benefit from being more vocal about what it does, rather than assuming people already know. Many charities are relied on by the public for more support than widely realised. Hospices are one example of this; they are charities which provide care that hospitals can’t. Not only will this potentially make charities more transparent and accountable, but it could help increase donations now and legacies in the future.
There are many routes to becoming more transparent about how funds are being applied, aside from an annual report. In a world that is increasingly digitally integrated, social media is a key channel to master, allowing a wide range of audiences and potential beneficiaries to be engaged with. However, there are plenty of other methods of outreach such as community engagement, coffee mornings and organised volunteering activities, which still hold immense value in communicating concise and accessible information.
Positive public image
Promoting a positive public image is crucial and in-person engagement is a central part of demonstrating what a charity stands for, and who the charity trustees are. In the majority of cases, they are just “normal” people without whose contribution the charity sector would be unable to operate.
The case of the Captain Tom Foundation, specifically the length of time it took for the truth to be fully uncovered, has raised some questions surrounding the Charity Commission’s role as a regulator. The Commission’s inquiry took two years which is typical in the charity sector, but there is the question of whether a swifter investigation could have been beneficial.
One of the issues with this particular investigation appears to be that the Ingram-Moores denied and disputed every finding the Commission made, drawing out the process. Even so, questions have been raised about whether the Commission itself should be given more powers or be more proactive when dealing with these contentious matters, rather than handing the decision over to trustees on what is often a very complex and challenging area.
The actions of the Ingram-Moores have had many negative repercussions – most notably the tarnishing of the Captain Sir Tom Moore brand. What’s important now is that charities learn from this story about how to create a transparent and accountable culture when it comes to their finances, as well as how to safeguard against risks. Founders must be clear from the outset what a charity is for, and make sure their vision is aligned with the cause the charity sets out to support. As long as this is prioritised, similar situations can be avoided in the future.
