Regulator finds 'misconduct and mismanagement' at children's charity

The Children's Welfare Foundation carried out unlicensed fundraising before being removed from the Charity Commission's register

The Charity Commission has criticised the trustees of a defunct children's charity for a number of failings, including unlicensed fundraising and failing to provide any evidence of charitable activity.

The commission opened an inquiry into the Children's Welfare Foundation in January 2008 after receiving numerous complaints about unlicensed fundraising in its name.

Although the charity lacked accounts and other financial records, the commission discovered that the foundation, which was set up in 2006, had raised more than £36,000 and spent more than £35,000 up to July 2008. But the trustees - who were uncooperative throughout the investigation, according to the commission - were unable to demonstrate any charitable spending or prove that payments made to them had been for expenses.

The regulator found that the charity failed to monitor a company that collected clothes on the foundation's behalf. The trustees and the company claimed the complaints from all over the country about the collections were about bogus collectors, but the commission said some of the collections carried out by the company had been unlicensed and broke fundraising regulations.

The regulator also criticised the trustees for not monitoring a trading subsidiary that failed to raise any money and closed in 2006 with debts of about £7,000. It said the trustees were guilty of misconduct and mismanagement and would have been subject to further action if they hadn't decided to close the charity last year.

The commission removed the foundation from the register in October and gave its remaining assets of £1,200 to Blackpool Victoria Hospital.

Andrew Hind, chief executive of the commission, said: "We will continue to monitor any fundraising ostensibly carried out in the name of the Children's Welfare Foundation. Households receiving leaflets claiming to represent this organisation should notify their local police or trading standards."

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