Charity Commission considers flagging up 'captive charities'

The Charity Commission has said it will consider a call from MPs to flag up on its new online register charities that receive a high percentage of their income from a single source.

The suggestion came during the regulator's appearance before the Public Administration Select Committee yesterday.

Paul Flynn, a Labour committee member, said he was concerned that some charities were used as fronts for commercial campaigns.

He said: "It is quite a coincidence, for instance, that nearly all patients' groups for people with particular diseases are funded by companies that make the drugs for those diseases. How do we know when they are being used as the mouthpiece of big pharma?"

Kenneth Dibble, executive director of legal compliance at the commission, admitted such 'captive charities' were an area of concern.

Andrew Hind, chief executive of the commission, said the regulator planned to work with the sector to produce guidance for the public on how to read charity accounts.

He was responding to concerns that the graphic on the online register showing the proportion of a charity's income spent on its beneficiaries would allow the popular press to draw up simplistic league tables of efficient charities

Hind said: "Ranking has been going on for 20 years. At least now we will have some influence on how newspapers write these stories."

The commission rejected suggestions for the online register to show the salaries of chief executives and to indicate whether a charity was being investigated.

Dibble said: "This would cloud public perception of the charity, but an inquiry could lead to complete exoneration."

He added that the commission was seeking the Treasury's permission to stop the clock on its nine-month target for completing formal inquiries when other authorities such as the police became involved.

Instead, the commission should aim only to complete inquiries in an average of nine months. He said: "Some can take a year or more if they are very complicated."

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