Charities owed money from the suspended donations website CharityGiving are only likely to receive about a third of what they are due, after a High Court judge delivered his ruling on how the funds should be distributed.
The bank accounts of the Dove Trust, which owns CharityGiving, were frozen by the Charity Commission in June 2013 and an interim manager appointed because of concerns about the charity’s trustworthiness, governance and financial management.
The commission asked the High Court to decide how to lawfully distribute the funds after it was reported by the Dove Trust’s interim manager, Pesh Framjee of the accountancy firm Crowe Clark Whitehill, that there was a shortfall between the funds held by the Dove Trust and the money owed to charities.
The High Court judgment, published today, says that a total of 1,812 charities and good causes are owed £1.7m, including gift aid, which has been claimed but not yet paid by HM Revenue & Customs, but the amount standing in the trust’s bank accounts is only £709,529.
It says that organisations that are owed money will receive about 33p for every pound they are owed.
The largest undistributed donation is worth almost £100,000.
Judge Henderson also ruled that there should be no distinction in the treatment of the donations made before Framjee’s appointment in June 2013, and that of the £466,000 in donations made afterwards. Another approach put forward to the judge would have made a distinction in distributions based on when the donation was made.
The fees and costs of Framjee and his team, which have already exceeded £250,000, have been paid by the Charity Commission.
Five representatives from the charity – all current or former trustees, including its founder, Keith Colman, and the former Norwich City goalkeeper Bryan Gunn – attended the hearing.
"We recognise that charities, good causes and generous donors may still be disappointed that their donations will not be paid in full and we are looking into all available options for recovery of further funds that are owed by the charity," said Kenneth Dibble, chief legal adviser at the Charity Commission. "Ultimately, it is the trustees who are responsible for the management and administration of the charity to account for any shortfall of funds."
The commission said that Framjee would carry out checks and calculations to confirm how much each of the charities and good causes would receive and the practical issues around distributing the funds. The first distributions are expected in September.
The commission's inquiry into the Dove Trust continues.