Association of Charitable Foundations seeks meeting with regulator over Cage funding issue

The Joseph Rowntree Charitable Trust, an ACF member, agreed to the Charity Commission's request to rule out further funding to the advocacy group, but the ACF says trustees should have discretion on such decisions

The Association of Charitable Foundations is seeking a meeting with the Charity Commission to discuss the issues surrounding the regulator’s actions over the Joseph Rowntree Charitable Trust’s funding of the advocacy group Cage.

The ACF said in a statement that only charitable trustees were able to best understand how to pursue their charity’s objectives and it supported their "discretion and right of independence to do so" within charitable law.

The ACF said it could not comment on the individual circumstances surrounding the decision by the JRCT, which is a member of the ACF, to provide funding to Cage, which is not a charity. But it said it wanted to discuss the wider issues raised by the matter and argued that charitable funders needed clear guidance from the commission.

The news comes as 190 people, including the actors Joanna Lumley and Vanessa Redgrave, Lord and Lady Kinnock and a host of charity chief executives, have signed a letter to The Times newspaper expressing their support for the JRCT, saying that it has "always acted with the greatest integrity" but has "come under regulatory pressure and media attack recently."

The Charity Commission issued a statement last Friday saying that the JRCT and the Roddick Foundation, which is not an ACF member, had both promised that they would not provide any further funding to Cage. Cage attracted widespread media attention last week after representatives of the organisation appeared to say that the UK security services might have played a part in the radicalisation of the terrorist known as Jihadi John.

The JRCT said it had agreed to the commission’s request to provide an unequivocal promise not to fund Cage in the future after being subject to "intense regulatory pressure".

The commission’s statement announcing the promise by the two funders said the commission expected "all charities and trustees to ensure that all charitable funds are used according to their charity’s purposes and in the way that the public would expect".

The statement from the ACF said it recognised the "recent controversy" surrounding the JRCT’s funding decisions had raised important concerns about the commission’s duty to maintain public confidence in charities.

"Alongside this, however, the commission has a vital role in upholding the independence of trustees to pursue their charitable objectives within the law," it said.

"In light of this, we are actively seeking to work with the commission to construct guidance around the complex issue of charitable funders supporting the work of non-charities for charitable purposes. Key to this guidance must be a shared understanding of the duties and responsibilities of trustees, as well as clarity regarding the role of the Charity Commission, the extent of its powers and its process for dealing with disputes.

"Only trustees are able to understand how best to pursue their charitable objectives in their specific context and ACF upholds their discretion and right of independence to do so, within the limits set by charity law."

The letter to The Times says that no organisation should be above reproach or regulation but the signatories said they wanted to "affirm the right of charities and foundations to freely pursue their objectives within the law".

It says: "The trust has a long and distinguished record of support for important civil society work. It has funded work that has made vital contributions to the Northern Ireland peace process, the transition to democracy in South Africa, and to furthering rights and justice, corporate accountability and democratic reform.

"At times its work has been risky or controversial, but in our experience it has always acted with the greatest integrity."

The Charity Commission issued a statement on Tuesday calling on charities to exercise "greater vigilance" when they consider funding non-charitable bodies.

The statement said charity trustees must ensure that funds given to non-charitable organisations must be used only for charitable activities that further the funder’s purposes and do not expose it to reputational risks. It said trustees should undertake reasonable due diligence to ensure they were protecting their charity’s funds and reputation when making grants.

It warned that failure to comply with these requirements could lead to the commission taking regulatory action.

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