Subject: How do I find out if a certain charity is being run legally?
Hi, I'm new and was hoping for some information which I am looking into on behalf of my mother.
My aunt died last month and left a very large amount of money to a charity way back in 1990 she appears not to have been unaware this charity was barely running. I've looked at the accounts of the charity on the charity commission website and is seemed to have almost flatlined - accounts for year ending 5th April 2010 showing just over £300 and spending zero.
I was wondering at what point is a charity no longer viable? what are the rules about charities if funding suddenly flatlines and spending is zero? Are they allowed to accept a large amount of money if it is obvious they are all but wound up?
I would be grateful for any help in this.
Thank you Charles
Hello Charles,
I take it from this that the organisation is a fully registered Charity, as you
found them on the Commission's website?
Well, technically speaking, an organisation has to be landing 5k a year to
register as a charity now. Though I'm not sure of the registered status of
those who cease to achieve this (of which there may be many given the current
climate). Although it is not a healthy sign, there is no legal obligation for
them to maintain a minimum level of income.
If you have strong concerns about the organisation, you could phone the Charity
Commission and discuss it with them.
What I would suggest however, is that:
- Twelve years is a long time in the Voluntary Sector, and huge financial changes have occurred. Large numbers of community organisations and charities are being forced to pack up due to funding cuts, changes in management, mergers, downsizing. It's worth contacting the charity themselves and asking them what is happening. You can't always guess from looking at bar charts on the CC website.
- If the accounts are showing just over £300 and no spending, then - to me - that would suggest prudence. It may not be a lot of money, but they are in profit (which is a lot better than the alternative) and they aren't spending money they don't have. Perhaps not their former glory, but not overtly reckless either, from the evidence provided.
I really would recommend talking to them directly. They may simply be a victim of the current economic squeeze on voluntary organisations.
In an ideal and utopian society, all charities should flatline to zero, having
achieved the purpose for which they were originally founded and no longer
providing services that are required. In reality, whereas that is unlikely ever
to happen, there is also no legal prerequisite for an organisation to always exist.
Even in a basic Constitution there is always a dissolution clause.
Keep us updated. Like to know what you find.
