An animal charity has been wound up and two trustees have been disqualified after an inquiry found it received just £1.8m from a £10m arrangement with a fundraising agency.
The Alternative Animal Sanctuary was set up to offer permanent care to abandoned and neglected animals across England and Wales.
But the Charity Commission opened an inquiry into the charity in March 2017 to examine serious concerns about its management, including its fundraising arrangement.
The commission subsequently appointed two interim managers to review the charity’s governance and operations.
The regulator’s inquiry found that more than £10m was raised from the charity’s arrangement with a fundraising agency between 2008 and 2020.
But only £1.8m of those funds were directly received by the charity, the commission found, because of the costs and fees of the agreement.
The regulator said this amounted to mismanagement and/or misconduct in the administration of the charity because trustees were not clear with potential donors about what proportion of their donations would go towards the charity’s purposes and had failed to comply with their legal duties by not properly overseeing the arrangement.
There was no oversight by the charity’s other trustees, said the commission, because the chair ran the sanctuary on a day-to-day basis and had full autonomy over its bank account.
The inquiry found there was little separation between the personal finances of the chair and those of the charity and it did not have a conflicts of interest policy in place, despite its trustee board including three members of the same family.
Additionally, the trustees did not keep adequate financial records and repeatedly failed to comply with their legal accounting responsibilities.
Consequently, the interim managers appointed by the commission determined that the charity should be wound up on the basis that it was not feasible or viable to address its significant underlying issues.
The charity was removed from the register of charities on 28 June, and more than £400,000 in remaining funds was distributed to 10 different charities with similar purposes working in Lincolnshire and the surrounding areas.
The regulator disqualified the chair from acting as a trustee for the maximum period of 15 years and one other trustee was disqualified for 10 years. Neither individual was named by the commission.
Amy Spiller, head of investigations at the Charity Commission, said: “This case is a reminder that good governance is more than a bureaucratic detail.
“The public donate generously to charities because they want to make a difference to the causes they care about.
“This means that when they donate their hard-earned cash, they want to see a high proportion of it spent on the end cause.
“It is right that those responsible for wrongdoing have been disqualified from serving as trustees.”