Penny Appeal has been subject to extensive regulatory scrutiny resulting in an Official Warning
The Charity Commission has closed its regulatory compliance case into Penny Appeal, and set out its findings and ongoing expectations of the charity’s trustees.
Penny Appeal was set up in 2008 to provide poverty relief, emergency aid and healthcare across Asia and Africa. The charity also works in the UK to help homeless people and women who have experienced domestic abuse.
The Charity Commission opened a compliance case into Penny Appeal in June 2020 following several complaints and concerns raised about how the charity was being managed. Concerns included failure to manage perceived conflicts of interest, poor record keeping and inadequate management of major supplier contracts.
The Charity Commission has reviewed evidence supplied by the charity’s trustees and is satisfied that progress has been made to improve the charity’s governance and management. However, it has been made clear to the charity’s trustees that there is still further work to do.
The Commission’s announcement follows last week’s publication by the Fundraising Regulator, which detailed findings of its investigation into Penny Appeal’s compliance with the Fundraising Code of Practice.
Earlier this year, the Information Commissioner’s Office issued the charity with an Enforcement Order over its marketing activities.
The Charity Commission has now closed its case, setting out its expectation that the charity’s trustees act upon recommendations by all three bodies.
Official Warning
The Charity Commission issued an Official Warning on 29 September 2023 after several meetings with the charity’s trustees and an inspection of the charity’s records and financial accounts. It found that the charity failed to maintain proper trustee meeting minutes to record decisions in relation to the purchase of a property, consideration of an unsolicited offer received to buy a property as well as decisions around retaining and redeveloping a property.
The charity failed to review a contract with its major supplier, thereby failing to act in the charity’s best interests. The regulator also found that the charity had failed to manage a perceived conflict of interest relating to its relationship with its major supplier.
Impact of regulatory intervention
Through its intervention, the regulator has secured several improvements to the charity’s governance. This includes advising the trustees to appoint a minute taker and to record conflicts of interest, which they have evidenced. The trustees have set dates to review third party contracts, and have appointed an external consultant to review the charity’s existing contracts and advise it on best practice. The charity will also terminate its contract with the major supplier that caused a perceived conflict of interest.
The trustees have mainly complied with the actions required of them and the Commission notes and welcomes their commitment to complete the outstanding actions promptly.
The trustees have been advised to make further improvements to the quality of meeting minutes. They must also promptly complete an outstanding review of governance and contractual relationships and arrangements with third party organisations established overseas, which forms part of an internal action plan set by the charity’s solicitors.
The Commission has now closed its compliance case and is monitoring the charity’s progress. It has informed the charity that any failure to complete the outstanding actions or failure to comply with any action required by the Information Commissioner’s Office and/or the Fundraising Regulator may also result in further regulatory action.
Tracy Howarth, Assistant Director for Casework at the Charity Commission, said: “Improvements have been made at Penny Appeal after several years of engagement about a series of weaknesses and shortcomings in the charity’s governance.
“This is a charity which receives significant support and donations from the public – it is extremely important that its governance is fit for purpose.
“The actions already taken have strengthened how the charity is run, and we are following up on the outstanding actions, which the trustees have assured us will be promptly addressed.”
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