Why is the charity regulator investigating Effective Ventures Foundation?
The Charity Commission, which registers and regulates charities in England and Wales, has launched an inquiry into Effective Ventures Foundation.
In this article partner and charities lawyer Samantha Pritchard explains why the charity is being investigated, and what other charities can learn from the inquiry.
Why is the Charity Commission investigating Effective Ventures Foundation?
The Charity Commission has launched an inquiry into Effective Ventures Foundation, which reported a serious incident to the regulator when a significant funder went bankrupt, putting the charity’s future at risk. The funder was the philanthropic foundation of FTX, the US cryptocurrency exchange.
Even though the Commission has confirmed that there is no indication of wrongdoing by the trustees, their concern lies in the potential risks to the charity’s assets, whether the trustees are protecting the charity’s property and the nature of the relationships between the charity and its funders and how conflicts of interest are identified and managed.
What can charities learn from the Charity Commission investigation?
Whilst we await the outcome of the inquiry, it serves as a useful reminder of the need for trustees to comply with the conflicts of interest provisions in their constitutional document, any conflicts of interest policy that they have in place, and the Charity Commission guidance in “CC29 Conflicts of Interest: a guide for charity trustees”.
This is especially important where there are close connections between the charity and those that fund them, where the charity is connected to a non-charity or where trustees, or those people or businesses connected to them, receive a financial or other material benefit from the charity.
Expert legal advice for charities from Muckle
For more information about the implications of the Charity Commission’s investigation contact Muckle LLP’s charities team – one of the only charity teams in the North East to be ranked in Tier 1 by Legal 500 UK.
For specific legal advice for charities or to speak with Samantha Pritchard, contact her directly using 0191 211 or [email protected].