When the 39 trustees of Age Concern England gather for their quarterly meeting in London today, the director-general, Gordon Lishman, could be forgiven for feeling nervous. High on the agenda is Heyday, the charity's troubled membership organisation for the over-50s.
Heyday, launched last year with a smart new website, a glossy magazine and a strong social mission, was very much Lishman's personal project, and he is likely to face some harsh questions from disillusioned trustees.
Its mission is to help members avoid poverty and ill health later in life, offer them products and services such as insurance and create a stronger political voice for their age group.
One year on, however, the mission has made little progress. Heyday has failed to meet its membership targets, prompted the departure of three senior people, led to 34 redundancies and raised serious dissent in the Age Concern federation.
The £5m invested in Heyday from the charity's reserves also seems unlikely to be recovered, and ACE is locked in negotiation with the Charity Commission over whether Heyday's purposes qualify as charitable.
The story is the stuff of nightmares for charity chief executives and trustees eager to start innovative projects. Privately, senior figures in the sector are asking how a potentially good idea could have been allowed to go so spectacularly wrong.
The proposal for Heyday featured strongly in Lishman's job application in 2000, when he was appointed director-general of ACE, the national representative body of the 400 groups in the Age Concern federation.
Lishman had noted the success of overseas organisations such as the American Association of Retired People, a powerful lobbying group with 35 million members, and he was convinced a similar organisation could work in the UK. In fact, a similar organisation already existed here: the Association of Retired and Persons Over 50 had been founded in 1989 but failed to thrive in the long term. In 2001, ACE acquired it at no cost from its insurance partner, Norwich Union.
Rather then develop ARPO50, however, ACE invested £250,000 in five programmes of research into the possibility of setting up a new organisation. Agencies employed in that research included advertising and marketing firm CHI & Partners.
The job of drawing up the business plan was given to Tony Page, managing director of Age Concern Enterprises (ACEnt), one of the charity's most successful commercial operations. Page was founder of ARPO50 and had joined Age Concern in 1988.
In March 2004, the trustees of ACE agreed to go ahead with the Heyday project and invest £5m of reserves in it, with further contributions from commercial partners. The following month, however, the first dissent began to emerge.
Neil Zammett, an ACE trustee, circulated a paper that said: "The overall investment will be between £12m and £20m, with between £3m and £5m coming from ACE's reserves. The payback period, an investment appraisal measure, is seven years. Generally, commercial organisations would be looking for a three to five-year payback period."
But Zammett's objections were not acted on, and in May 2004 60 per cent of the Age Concern Assembly, which represents the entire Age Concern federation, voted in favour of the project. An operational board began to meet weekly, chaired by Lishman.
As the work on Heyday continued, the decision was made to transfer ACEnt's insurance services from Norwich Union to Fortis. The move, according to Age Concern's financial review for that year, was linked to "the forthcoming membership programme".
By early last year, IBM had the website ready, publishing company Redwood had the magazine on the stocks and Heyday was ready for launch. The research had concluded that the 'organiser model' would be the best way to sign up members, and more than 30 recruiting staff had been hired around the country to sell membership subscriptions costing £26 a time.
As the launch approached, however, there was a crisis over the membership target, which - according to internal documents seen by Third Sector - stood at 796,000.
Lishman and Ailsa Ogilvie, who had been seconded as director of Heyday a few months before, played a key part in revising the target down to 300,000 by the end of the organisation's first year. At this point, a dispute appears to have set in that led to the departure three months later of Page. Age Concern says he left by mutual agreement and that the large lump sum given to him was for "intellectual property rights". The terms of the payment are subject to a confidentiality agreement.
Page's departure was followed by the resignations of Des LeGrys, chair of ACEnt, and Norman Biddle, chair of ACEnt Holdings. They both declined to comment, but it is understood that their resignations were prompted to a great extent by their concerns over Heyday and the way it was being run.
Amid this turmoil, Ogilvie was confirmed as director of Heyday and the launch went ahead at the end of May. It did not go well. In September, ACE trustees were told that recruitment was nowhere near the target. In December, a new business plan was presented; it focused on 'affinity membership' - persuading employers to pay for their staff to join Heyday at the £26 rate.
By now, alarm was spreading through the Age Concern federation. On 3 January this year, Dave Punshon, chair of Age Concern North East, wrote to Catherine McLoughlin, chair of ACE, about the concerns of his region.
Punshon described how members of the Age Concern trading alliance had lost between 20 and 40 per cent of their trading income, partly because the transfer of insurance to Fortis had entailed a loss of renewals and lower commission rates.
He said Page had made it clear before his departure that alternative funding was required if ACEnt was to sustain itself in the long term, and "the answer to this was Heyday attracting younger older people to buy products".
Now that Heyday was struggling, Punshon asked, what was the ACEnt strategy to make up the necessary business? "Heyday is a major failure," he concluded. "We believe the reasons for this should be comprehensively evaluated, preferably through an independent evaluator."
The bad news was coming thick and fast. ACE's legal team had been to a meeting with the Charity Commission just before Christmas. On 11 January, Daphne Young of the commission's large charities unit wrote to Bill Prouse, ACE solicitor and legal adviser, to express doubts about whether Heyday's purposes were charitable and to query the constitutional status of its members.
In February, Third Sector revealed that Heyday had recruited only 45,000 members, less than one-fifth of its target, and that 31,000 of these had been transferred from ARPO50. The same month, 34 people, hired to recruit for Heyday, were made redundant.
In April, the strongest criticism yet came from the London region of Age Concern, which passed a resolution describing Heyday as a "debacle" and calling for ACE to be restructured to "ensure that those making key decisions have expert commercial experience".
It also claimed that as much as £16m had been poured into the venture.
In an interview with Third Sector in April, Lishman said the aims of Heyday remained valid and he thought it would eventually succeed. What had happened so far, he said, "does not feel, in essence, that uncomfortable a process to me".
He said the charity had a good record in getting new projects right by being flexible and changing course to find the right way to make them work. "This is what we do," he said.
He declined to give a full account of the investment in Heyday, saying it would be revealed in ACE's annual accounts. Asked about an internal document seen by Third Sector that said expenditure had totalled nearly £10m, he said: "£10m is not a figure I recognise."
He added: "I accept leading responsibility and accountability for Heyday and everything else. I definitely think it will work."
Lishman has since asserted that he remains confident ACE will be able to convince the Charity Commission that the purposes of Heyday are charitable.
ACE has declined to say how many Heyday members have been recruited under the latest business plan. A spokesman said there were no "external membership targets", although there were "internal milestones".
Meanwhile, the Age Concern federation faces two other challenges, one of which relates to the insurance issues mentioned by Punshon. ACE says trading income - primarily from insurance - has dropped at a time of increasing expenditure, leading to a small number of redundancies and a short-term recruitment freeze.
ACE has also been engaged since 2005 in a governance review intended to simplify the federation's complex structure and network of trading companies. The discussion with the Charity Commission has now become entangled in this process.
A spokesman said the key ACE board meetings on Heyday would be today and in August. If there was any change in the situation, there would be an announcement, he added.