Trustees of a grant-giving charity in Cheshire have repaid £24,000 to the charity after it awarded a grant to a company linked to one of its trustees, according to the Charity Commission.
In a case report published today, the regulator says it received a complaint about the Earl of Chester’s Fund, which donates to causes in Cheshire, about a £24,000 grant to a non-charitable company with links to one of the trustees.
According to the report, a media article claimed the grant was for the set-up and development costs of a company that produces giant figurines.
The trustees claimed the company provided support to ex-offenders and the long-term unemployed, the case report says, but included no restriction on the grant to the company, which the commission decided meant it was not made "in furtherance of the charity’s objects".
The report says the trustees were unable to demonstrate that they had "considered the making of the grant in detail", with the minutes of the charity’s board meetings showing no evidence that the trustees considered the charitable purpose the grant would be used for, if the trustees would monitor its use and how charitable restrictions could be communicated to the company.
The case report says the trustees also failed to manage conflicts of interest and were in breach of trust because they did not absent themselves from discussions involving conflicts of interest.
The trustees also failed to have more than one meeting a year, with some grants discussed over email on an ad hoc basis, the report says.
It adds that trustees collectively paid the £24,000 to the charity as a goodwill gesture and have improved oversight of its grant-making procedures
According to its accounts for the year to 5 April 2016, the Earl of Chester’s Fund had an income of £207,684 and spent £565,375.
The charity did not respond to a request for comment before publication.