Charity Commission says trustees breached their duty by not considering whether donations were in their best interests
A grant-making foundation has been reprimanded by the Charity Commission over donations to the Conservative Party totalling £900,000.
The Garfield Weston Foundation, which had an investment income of £38.5m in 2008/09, owns nearly 80 per cent of Wittington Investments Limited.
WIL is a holding company that owns large stakes in a number of high-street companies and posted profits of nearly £400m in 2007/08.
Four of the foundation's nine trustees are also on WIL's seven-strong board.
A commission investigation, the report of which was published yesterday, revealed that WIL had made £900,000 in donations to the Conservative Party between 1993 and 2005.
Before 2000, there were no legal restrictions on companies making political donations. Since then, donations have to be authorised at a general meeting.
However, the report says that owing to an "oversight", WIL did not seek any shareholder authority for donations until its 2006 annual general meeting, when a resolution was passed authorising it to make donations of up to £1m over three years.
The report says the foundation's trustees did not think making political donations posed a risk to its reputation and regarded it as a business matter for WIL's directors.
But the commission said the size of the donations and their political nature meant they could not be regarded "merely as day-to-day business decisions".
The report says all of the foundation's trustees had breached their duty by not giving formal consideration to whether political donations by WIL were in the foundation's best interests before voting for the 2006 resolution.
But the commission decided not to seek restitution from the trustees because it accepted they had acted in good faith and were taking legal advice on whether any of the donations made before 2006, whose recipients also included Tory-leaning think thanks the European Foundation and the Centre for Policy Studies, should be refunded.
One donation of £100,000 has already been repaid by individual WIL directors.
In a statement, the foundation said the company had not made any political donations since 2005 and had no plans to do so. It said the donations had been small in the context of the company's profits and had been approved in 2006 because they could "commercially benefit" WIL.
"Trustees of any charity have a duty to maximise the returns on its investments so that these returns can be used for charitable purposes," the statement said.
"At no point did the trustees consider these [donations] as effectively donations by the charity itself."