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Mitigating risk: How does your charity fare?

Ken Young

26 January 2017

Wilkins Kennedy’s Charity Seminars have become a popular feature in the annual calendar. Our aim is to bring together a number of not-for-profit organisations and charities and discuss with them any issues affecting their sector. With such a vast number of these organisations around the Surrey area, there was certainly a lot on the agenda at our most recent seminar, held at the Talbot Hotel in Ripley.

Risk was the topic of the day and the three speakers covered areas such as safeguarding, insolvency and fraud, as well as having a look at the circumstances and  media hype surrounding the recent high profile collapse of the charity Kids Company – a good example of how forceful characters in leadership roles might be considered a threat, but more on that later.

The first speaker was a guest of ours, Christine Goodyear from Goodyear Blackie Herrington solicitors. She talked about  safeguarding, which is relevant to all charities that deal with vulnerable people, which includes children and people who are vulnerable due to their age, health or physical or mental abilities.

Christine focused on the Trustees’ duties and responsibilities, including putting safeguards in place to protect vulnerable people through internal policies and procedures. The challenge for the Trustees is how they know that these policies and procedures are working properly and Christine encouraged the Trustees in the audience to think about how they might achieve this to enable them to fulfil their responsibilities. Checking up and challenging are key watchwords. She also talked about the impact of failures in safeguarding, where the responsibility could lie and the likely knock-on effect on the charity’s reputation.

This was certainly some food for thought and led nicely into my own presentation, where I discussed the high-profile case of Kids Company – the charity that closed in August 2015 after 19 years of trading in South London.

Kids Company claimed to provide support to up to 36,000 vulnerable inner-city children and young people. There were a number of prominent supporters, including David Cameron who later claimed to be “mesmerised” by the charity and its founder, Camila Batmanghelidjh.

Following a probe into the charity’s finances in 2015, it transpired that Camila was unable to state how allocated funds had been spent and a number of inconsistencies in the information on the Charity’s funding and the number of children benefitting from the Charity’s activities came to light.

Camila had unrivalled power within the organisation and dominated its activities with apparently very little control being exercised by the Trustees.  Domineering characters should always be challenged – and even be considered a real threat to the success of an organisation.

This led us into the final presentation from Louise Brittain, contentious insolvency practitioner and Partner here at Wilkins Kennedy. She spoke about how charities can protect themselves from fraud, which is a growing issue, and the threat of insolvency. Louise had plenty of anecdotes from her career to date, illustrating how some cases of fraud are perpetrated  and how some  are easily over looked, including staff members  stealing from petty cash and invoice fraud. Whilst these stories were able to generate some laughter, providing some light relief from the heavy topics of the morning, it reminded us that the solutions are often simple. Ask if you aren’t sure; if something seems suspicious, it probably is. If you are thinking about making a grant or donation to an organisation, go and meet them face to face as this will help eradicate any uncertainties about the characters you are dealing with. Make your checks, do your homework and make sure you are 100% happy.

If you are interested in joining Wilkins Kennedy for the next charities seminar in May 2017, keep an eye out for more information coming soon to our events page on our website www.wilkinskennedy.com/wk-events.

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