Little did the National Bullying Helpline realise that the furore over a breach of confidentiality would result in the Charity Commission launching a formal inquiry into its activities and wider practices. This is a salutary reminder to every charity to keep its house in good order. Whilst enquiring about one matter the Commission may well discover and pursue other issues.
The Commission has received over 160 complaints about the charity most of which centre around the way it deals with confidential information. Interestingly, the Commission has opened its inquiry on the grounds of its statutory objective to increase public trust and confidence rather than the objective of promoting trustees' compliance with obligations in exercising proper control and management of their charity. However, it is reported that the inquiry will also look at how people were referred from the helpline to a business run by one of the charity's trustees and will review allegations that the founder, Christine Pratt, used the helpline to solicit business for the consultancy business she runs with her husband who is also a trustee.
Trustees are prohibited from benefiting personally from a charity, except in certain particular circumstances. If the Commission finds that trustees have used a charity to benefit personally the consequences may include a requirement to repay monies to the charity, the trustees being replaced and possibly even criminal proceedings for fraud.
It is important that charity trustees understand the rules as regards the limitations on benefits that can be received by trustees in the context in which their charity operates and then ensure that any arrangements between the charity and the trustees (even indirectly as in this case) remain within these rules.
It is equally important that all charities which process personal data (and particularly those who process any form of sensitive personal data) are aware of the requirements of the Data Protection Act 1998 and have in place adequate policies and procedures to ensure that obligations of confidentiality are not breached.
This case illustrates how easily even a very small and relatively new charity can be thrust into the spotlight and drawn to the Commission's attention. It also highlights the need for charities to ensure they are not just well run but also run in accordance with the rules. In some cases the Commission may need little encouragement to begin asking questions or move immediately to a formal inquiry, particularly if (as in this case) the charity is overdue in filing its annual documents with the Commission!
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