Charity defends awarding £1.6m in contracts to company whose president is a long-standing trustee

The healthcare charity MSI Reproductive Choices has defended awarding almost £1.6m in contracts to a company whose president is also one of its trustees.

Philip Harvey, who has been a trustee of the charity since 1992, is also the president of DKT International, a company he founded in 1989. 

The company describes itself as a non-profit organisation that uses “the power of social marketing on some of the largest countries with the greatest needs for family planning, HIV/Aids prevention and safe abortion”.

MSI’s latest accounts for 2020 show the DKT group of companies was “party to several agreements” with the charity.

The accounts say the charity subcontracted £1.1m worth of services to DKT, and the company granted supplies to the charity worth £147,000, while a subsidiary of DKT supplied goods to the charity totalling £346,000.

The charity said trustees had no involvement in the procurement of goods and services. 

An MSI spokesperson said: “We have a clear and robust conflict of interest policy that applies to all team members, including the executive team and board of trustees, and our governance structures have been externally audited. 

“As two of the largest family planning providers worldwide, it is in no way unusual for MSI Reproductive Choices to partner with DKT where the work demands it.”

The Charity Commission said it was lawful for trustees to enter into contracts with companies they had an interest in as long as they were complying with charity law and the requirements set out in the charity’s governing document. 

“We expect all trustees to identify and appropriately manage any conflicts of interest and make decisions in the best interest of their charity,” said a commission spokesperson. 

MSI’s accounts also show that the performance-related bonus paid to the charity’s chief executive Simon Cooke fell for a second year running

His bonus fell from £124,000 in 2019 to £20,000 in 2020, but his total pay still topped £244,000. But this is still a substantial reduction from between £430,001 and £440,000 in 2018 and between £340,001 and £350,000 in 2019. 

The charity, which changed its name from Marie Stopes International last year, had previously been criticised by the Charity Commission for failing to properly record discussions that led to Cooke being awarded such a large salary package in 2018.

The charity said: “A proportion of our CEO’s salary is dependent on achieving certain objectives and while MSI’s teams did remarkably well to continue services throughout the pandemic, we did not achieve our growth targets overall, which impacted his remuneration.”

Total income at the charity was down £14m year on year to £294m, the accounts show. 

Total spending fell by £13m to £288m and spending on charitable activities fell by a similar amount to £286m. 

The charity paid out £444,000 in redundancy and termination payments but said it did not gather data on the number of staff this related to because it was not a requirement under the Sorp.

But it did say that the redundancies were included as part of a larger figure in the accounts that shows the average number of staff fell by more than 800 employees, down from 10,300 in 2019. 

The charity said: “The eight per cent reduction in staff numbers was due to a number of factors: some relating to the end of projects and funding cycles, and others due to the financial impact of the pandemic and the need to preserve, secure and protect in order to ensure the sustainability of the organisation.”

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