Hospice charity faces serious misconduct and mismanagement probe

The Commission has concluded its second inquiry into the charity Hospice Aid UK leading to a conclusion of serious misconduct and/or mismanagement. This follows an Official Warning in 2021 and a previous statutory inquiry.

Hospice Aid UK was founded in 2002 with aims that included facilitating and promoting the relief, care and treatment of the sick, especially of the dying, and the support and care of their families and carers and of the bereaved.

As part of the inquiry, concluded today, the regulator issued the charity with an Official Warning after finding misconduct and/or mismanagement by its trustees. This included trustees’ failure to fully comply with a previous action plan, which had required them to significantly increase the proportion of the charity’s income spent on supporting hospices.

In 2016, following the conclusion of a first inquiry, the Commission issued an action plan to address serious misconduct and mismanagement, directing the trustees to improve the charity’s governance, management and fundraising arrangements.

The regulator opened a second inquiry after a review of the charity’s 2018 accounts raised a number of concerns. It became clear that the trustees had not fully complied with the first inquiry’s action plans and had renewed a costly direct mailing agreement with a specialist direct marketing and fundraising agency, despite the Commission’s earlier findings that this was not an effective use of charitable funds.

This second inquiry was opened to investigate the proportion of the charity’s income being applied for exclusively charitable purposes, as well as the trustees’ management of fundraising arrangements and the extent to which they had complied with their legal duties and previous Commission directions.

The second inquiry, concluded today, finds that the substantial funds generated were consumed almost entirely by the direct costs and fees of running the fundraising activity. Between March 2013 and July 2020, the charity raised over £3.2m but the direct costs and fees of this fundraising came to just over £3m leaving less than 6% for charitable activities.

The regulator also finds:

  • That the trustees did not undertake due diligence and review the fundraising agency’s past performance before renewing the agreement;
  • An ongoing lack of transparency in the charity’s accounts about the fundraising agreement, the terms of which were not in the charity’s best interests, amounts to misconduct and/or mismanagement by the trustees;
  • Poor financial management, including trustees’ failure to submit accurate sets of accounts or a staff appraisal policy.

The regulator used its formal powers and issued an Official Warning in 2021, requiring the charity to ensure future financial statements and trustees’ reports complied with the Charities’ Statement of Recommended Practice. The Official Warning also requires the trustees to exercise sufficient oversight of the charity’s activities and finances and prevents the charity from entering into commercial agreements that are not in the charity’s best interests.

Amy Spiller, Head of Investigations at the Charity Commission, said:

The public expects trustees to ensure that the money they donate goes towards delivering the charity’s objects and is carefully managed in the best interests of the charity. In this case, a woefully small proportion of funds generously donated by the public in support of hospices reached the intended cause. This was a direct result of the trustees’ misconduct and mismanagement.

Cases like this risk seriously undermining public trust and confidence as well as people’s willingness to donate to the thousands of well-run charities doing great work across the country.

This is not the first time the trustees of Hospice Aid UK have let their charity down. We will monitor their activities closely and will not hesitate to take firm action should there be any further failing.

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