FINANCE NEWS: Trusts rapped for non-disclosure

Nine major trusts have been warned by the Charity Commission that they face formal inquiries if they don't improve the information they make available.

The accounts of the grant-making trusts, whose identities have not been revealed, will be monitored to see if they have made changes agreed with the Commission.

According to the chief charity commissioner John Stoker: "If this monitoring highlights a failure to implement the commission's present advice, this may lead us to instigate a formal inquiry under Section 8 of the Charities Act 1993."

Among the misdemeanours identified by the Commission are failures to supply accounts, to list grants made, to provide analysis of the grants and to include a policy statement on grant giving.

The action was prompted by the Directory of Social Change, which asked the commission to look into the failure of many trusts to comply with SORP requirements.

DSC researcher and co-author of the annual Guide to the major trusts Luke FitzHerbert hailed the clampdown as a major breakthrough. "This issue has been our focus for 18 years. We are talking about 20 per cent of total cash income of the sector - £1bn of public money," he said.

He blamed a culture of secrecy "deeply embedded" in the trust sector.

"Many trusts see themselves as private institutions. These are rich people not used to having their financial dealings talked about by the plebs."

According to FitzHerbert most trusts do not explain or analyse their grant making despite this being a requirement of the SORP.

Several trusts are singled out in the guide for the same failings as those identified by the commission. The Al Fayed Charitable Foundation is criticised for not responding to repeated requests to supply its annual report, while the Mulberry Trust requested that its grants list be kept strictly confidential despite this being in contravention of the SORP.

The Association of Charitable Foundations declined to comment.

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