Charities continue to remain listed on the Charity Commission’s official register for up to eight years after they have stopped operating, a Third Sector investigation has found.
The London-based charity Choices Independent Living and Community Support Service remains on the register despite appearing to have been inactive since 2004, when it last filed its accounts to the commission. Overdue documents can be one of the prime indicators that a charity has stopped operating.
Other examples were the Sunderland Voluntary and Community Sector Partnership, the Family Service Units and the Children’s Literary Trust – all still listed on the register up to seven years after they appear to have closed.
According to the commission’s guidance, trustees should inform the regulator if their charity has closed. In cases where this has not happened, the regulator has the power to automatically strike them off the register.
However, the commission does not automatically remove charities it considers ‘high-risk’, such as those with significant assets or where it thinks there is a risk to beneficiaries or donors, until it makes further inquiries.
In a statement, the commission said that 4,166 inactive charities had been removed from the register in the year to March 2011 and it had carried out investigations into 108 high-risk charities that had failed to file their annual accounts for more than six months.
Twenty-nine of these were removed after it was established that they had ceased to exist.
A special search carried out by the commission after a request by Third Sector revealed that 873 high-risk charities with incomes of more than £25,000 were on the register with documents more than two years overdue. A total of 2,789 high-risk charities with incomes of more than £25,000 had documents more than six months overdue.
Following Third Sector inquiries, the Children’s Literary Trust, Family Service Units and the Sunderland Voluntary and Community Sector Partnership were removed from the register once the commission received confirmation that they had ceased to exist.
But Choices Independent Living and Community Support Service will remain on the register until its liquidation has been completed.
Speaking before the Sunderland Voluntary and Community Sector Partnership was removed from the register on 19 January, Paul Brown-King, who managed the accounts for the charity, said he was unsure why the charity had remained on the register for so long. "I was under the impression that it had been struck off many years ago," he said. "The organisation had no assets as far as I’m aware – apart from a few chairs and tables."
A spokeswoman for the commission said: "Although it is the duty of charity trustees to inform the Charity Commission once a charity winds up, unfortunately there are instances where trustees fail to inform us that this is the case.
"The Charities Act 2011 requires the commission to keep an accurate register of charities. With more than 180,000 registered charities in England and Wales, our approach to keeping the register up to date must be proportionate, taking into account the potential risks of involved in either automatically removing a charity or keeping it on the register."