One year on from our original review of the Captain Tom Foundation, stories about the charity continue to emerge, making headline news. The Charity Commission inquiry has escalated its initial compliance checks into a full statutory investigation and it has recently been reported that the charity is likely to wind up. There are some valuable lessons for charity trustees to learn from the case so far.
Our earlier report covered:
The payments made by the charity to private companies set up and controlled by Captain Sir Tom Moore’s daughter Hannah Ingram Moore and her husband (namely Maytrix and Club Nook Limited). The payments covered third party consultancy costs and accommodation, security and transport for Captain Sir Tom while promoting the charity UK-wide with his daughter.
The relatively small size of the charitable payments made by the charity in its first year, compared to the payments made to cover administrative costs (including the costs mentioned above).
The charity had applied to the Charity Commission for permission to employ Hannah Ingram Moore as CEO of the charity on a salary of £100,000 per year for three days per week (later amended to full time). Prior to this date, Hannah Ingram Moore had been a trustee of the charity as well as her husband. The Charity Commission had requested evidence of the benchmarking carried out by the charity to support this and explain why it was appropriate to appoint Hannah Ingram Moore for this role. The Charity Commission refused, saying the salary was not reasonable or justifiable. But it did allow the charity to appoint her as interim CEO for a maximum 9-month period while a new CEO was recruited.
The Charity Commission closed their compliance case, stating that the reimbursed payments were reasonable. They were also satisfied that conflicts of interest were adequately identified and managed.
The launch of the Charity Commissions’ statutory investigation
Despite closing the compliance case, the Charity Commission opened a full-blown statutory inquiry into the charity in June 2022. They still had various concerns which included “the charity’s independence from the family of the late Captain Sir Tom Moore and businesses connected to them.”
The Charity Commission in particular is considering:
Whether the trustees are responsible for the mismanagement or misconduct of the administration of the charity. Did the charity suffer any financial loss as a result? The Commission will look at payments received by the trustees and whether they received any unauthorised private benefit.
Whether the trustees did in fact adequately manage conflicts of interest. In particular any conflicts of interest between the charity, the family and the private family companies. This necessitates reviewing intellectual property rights and trademarks; and
If the trustees complied and fulfilled their statutory duties and responsibilities under Charity Law.
What are the intellectual property right/trademark issues?
The private family companies controlled by Mrs Ingram Moore and her husband were set up before the charity. The famous images of Captain Sir Tom Moore and his name were then trademarked by the family at the time and registered in the name of Club Nook Limited, not the charity. This meant that Club Nook Limited could licence their use (for a fee).
Recent newspaper stories have reported that:
Club Nook Ltd received a payment under the licensing arrangement when Hannah Ingram Moore spoke at the Virgin Media O2 award ceremonies, featuring the charity. At the time she was also the paid interim CEO of the charity. It has been reported that Hannah Ingram Moore did not seek the charity’s approval before entering into this commercial arrangement with Virgin Media O2. It’s not clear whether the charity also benefitted from the payment.
Club Nook Ltd was paid for the production of Captain Sir Tom’s image on a certain brand of gin bottle.
The family used the charity’s name to build a pool house and spa at their Bedfordshire home. Mr and Mrs Ingram-Moore applied for planning permission with the local council in their own name but also used the charity’s name and logo, stating that they wanted to build an office for the charity. The couple have apparently been ordered to take the building down as it was unauthorised.
So, what happens next?
The Charity Commission will be looking closely at the extent to which the charity benefited from these arrangements. Was it consulted and did it consent to the charity’s name and logo being used by the family in this way? This is an important aspect of reputation management, as there is no doubt that the negative press stories about the family have caused considerable damage to the charity. The charity recently announced that while the statutory investigation is ongoing, they have “closed all payment channels” and stopped seeking external funding from donors.
This is a complex case because the trademarks were registered in the name of Club Nook Ltd, rather than the charity. This immediately limited the degree of control the charity could exercise over the way in which the images and name were used.
There are also clear issues here concerning conflicts of interest between the charity and personal financial gain received by the family and their private companies. The question is whether they were properly identified and managed correctly.
While the investigation is ongoing, the Charity Commission is of course, unable to comment. We would reiterate that the purpose of an investigation is to allow the Charity Commission to fully investigate all the facts and evidence, which may show that there is no wrongdoing. In the meantime, it indicates that there are still many unanswered questions about the charity and it continues to dominate the headlines. It is not known at this stage when the Charity Commission investigation may be concluded.
Our top takeaways for charity trustees
This case acts as a reminder to all trustees of the importance of:
Understanding the nature of their statutory duties of responsibility and care as charity trustees. All decisions must be made in the best interests of the charity, and the trustees need to be able to demonstrate this through their record keeping.
The need to identify and properly manage actual and potential conflicts of interest. This could be financial, as seen here between the financial interests of the charity and the personal financial interests of the family and family companies; and 2) any conflicts of loyalty, which could potentially affect the impartiality and decision-making ability of a trustee if they are unable to put the interests of the charity first before their own personal interests.
Every charity should have a robust conflict of interest policy and keep their conflict of interest register up to date. Trustees must be able to demonstrate that they understand and closely follow the conflict of interest policy. Where any actual or potential conflict of interest is declared, this must be carefully recorded in the minutes along with the action taken. All trustees must be able to show that they put the charity first before any personal or financial interest they may have.
Reputation management – protecting the good reputation of your charity is paramount. The trustees must ensure at all times that the charity’s name and logo and the goodwill attached to it are being used appropriately, such as under a licensing arrangement. Is the charity also getting maximum benefit from it? In this case, question will be asked about why the charity didn’t object to the use of its name, logo and image in certain situations.
If you have questions about any of the issues raised in this article, please contact Victoria Simpson.
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