- The Financial Times (FT), of all newspapers, would strongly disapprove of an entity knowingly failing to address problems with its accounts. Yet the UK arm of a multinational charity long-linked to the FT is doing just that. What’s more, the charity was unwilling to answer questions about its links to the newspaper, particularly in relation to the charity’s office, which is at the FT’s headquarters in London.
- I first came across charity Room to Read UK Limited (registered charity number: 1125803) last month after several full-page ads in the FT. These were promoting the charity’s fundraising event in central London’s Hyde Park on 12 June, an “exclusive” 10km race to find “London’s fastest exec”. All very London-centric and corporate, then.
- The charity, whose global headquarters are in San Francisco, USA, promotes both literacy and girls’ education in “developing” countries. Its slogan is “World Change Starts with Educated Children.” (Its capitals.)
- In 2016, income at Room to Read UK Limited was £2.7m, according to the latest accounts, made up to 31 December 2016. There are two problems with the accounts, both relating to salary disclosure, which is inadequate. Further, the auditor seemingly failed to spot the problems.
- I refer to the requirements for charity accounts, Charities SORP (FRS 102), which the accounts state they follow, in particular Module 9, “Disclosure of trustee and staff remuneration, related party and other transactions” (http://charitiessorp.org/media/620787/frs102_module-9.pdf). The first problem is that the accounts fail to make the required salary disclosures specified in para 9.30. While the second one is that the accounts also fail to make the required salary disclosures specified in para 9.32. Paras 9.31-9.32 relate to “key management personnel”.
- Public contact for the charity, Sarah Myers Cornaby, who is “senior development director, Europe and Africa”, acknowledged the two problems in an email. She added that both would be corrected “for our 2017 accounts”.
- Thus there’s no intention to address the problems with the 2016 accounts right now. The charity’s decision not to re-submit its latest accounts in the correct format demonstrates a lack of urgency. But that’s not all.
- The public rightly expects charity accounts to be full and accurate. How can the public trust and have confidence in Room to Read UK Limited, when it’s happy to knowingly ignore the requirements for charity accounts?
- The charity showed similar disdain when I queried its links to the FT. Ms Myers Cornaby said in an email: “The FT is a long-term supporter of Room to Read.” The registered office address for Room to Read UK Limited is the UK home of the FT – and has been since 18 May 2016, according to Companies House records. Ms Myers Cornaby confirmed in the same email that the charity’s office is now actually at that address, too. But she declined to give further details about the arrangements between the newspaper and the charity in relation to the office, writing: “Our arrangements for 2017 will be reflected as appropriate in our future audited accounts.”
- Room to Read UK Limited has been linked to the FT for a long time. FT chief executive John Ridding, for example, is chair of the charity’s advisory board, which “exists to support the promotion and fundraising activity of Room to Read in the UK and, where appropriate, Europe.” The charity accounts for the last five years, available on the Charity Commission website, all show the FT boss in that role. In March this year, meanwhile, Mr Ridding became Room to Read’s board chair – chair of the global board of directors, that is (screen shot in Figure 1). The multinational organisation is evidently keen on boards. And Mr Ridding.
- Indeed, Mr Ridding is billed as one of the “30 top London executives” taking part in the charity’s forthcoming 10km race in Hyde Park (screen shot in Figure 2). There’s no, er, running away from the fact that when it comes to advertising in the FT, and so extensively, or locating the office, it can’t hurt Mr Ridding is chief executive.
- The FT is rightly critical of opaque, unaccountable organisations. What a pity, then, Ms Myers Cornaby was unwilling to answer questions about the links between the newspaper and Room to Read UK Limited, particularly in relation to the charity’s office.
On 22 August 2017, I revealed that regulator the Charity Commission was going to instruct charity The Lee And Bakirgian Family Trust (registered charity number: 1046940) to re-submit its latest accounts “in the correct format”. This was after earlier that month I’d brought to the commission’s attention the problem with the latest accounts, made up to 30 September 2016: they didn’t contain an independent examiner’s report to the charity trustees. Here are the deficient accounts, downloaded from the commission on 27 July 2017: 0001046940_AC_20160930_E_C. Well, the north west charity has duly re-submitted them – but there’s no record on the commission’s public register of charities that the accounts had to be re-submitted. The re-submission is hidden. The fact of re-submission is hidden in the new version of the accounts, too. Both are unsatisfactory. The charity’s records should surely be complete and transparent.
Lord Lee of Trafford (Lib Dem) is a celebrated private investor, who, among many other things, has for a long time written a column in the FT newspaper about investing. How ironic: former MP Lord Lee pores over company accounts and tells FT readers how to interpret them. Yet the latest accounts for his own charity – he’s a trustee – were inadequate, according to the regulator.
On 18 September 2017, the commission told me in an email Lord Lee’s charity had now re-submitted the accounts. Nevertheless at date of publication there’s no indication of the re-submission on the commission’s public register of charities. There the revised accounts, which aren’t identified as such, are erroneously shown as received by the commission on 28 April 2017 – the date when the original accounts were filed there. In other words, the regulator hides the re-submission.
It’d be less of a concern if the revised accounts themselves documented the fact of re-submission and why it was necessary. But they don’t.
So the latest accounts now include an independent examiner’s report to the charity trustees – which, although undated by the examiner, obviously helps to maintain public trust and confidence in Lord Lee’s charity. But neither the commission’s public register of charities nor the accounts themselves record the fact of re-submission and why it was necessary. So much for transparency and accountability.
When I brought to the commission’s attention the new problems, a staff member said in an email: “We are in the process of reviewing and updating the ‘search for a charity’ and register page, I have forwarded your comments to the relevant team for them to incorporate into their feedback for future versions.” I won’t hold my breath.
- Lord Lee of Trafford (Lib Dem) is a celebrated private investor, who, among many other things, has for a long time written a column in the FT newspaper about investing. One of the former MP’s declared non-financial interests is his role as a trustee of charity The Lee And Bakirgian Family Trust (registered charity number: 1046940). Here I reveal a problem with the latest accounts for the north west charity, made up to 30 September 2016.
- Income that year, £30 236, is above the statutory threshold for external scrutiny of the accounts, £25k. Yet there was no external scrutiny of the accounts. That is, there’s no evidence of an independent examination.
- In July 2017, I twice requested a comment from the public contact for the charity, Simon Ellis at accountants Jackson Stephen LLP, Warrington (email). I didn’t receive a response.
- On 18 August 2017, a spokesperson for regulator the Charity Commission told me in a written statement: “The Commission will be contacting the trustees to request they re-submit their accounts in the correct format so that we can be satisfied the accounts we hold are accurate and in line with charity law.”
- Here I show that GambleAware, the leading gambling charity, isn’t nearly transparent enough – despite being one of the most transparent charities. The fat-cat pay of the new chair – her salary is nearly 70 per cent higher than the figure in last year’s job ad – and her failure to disclose in full personal interests, too, risk damaging the charity’s reputation. The role of Atlas Communications Partners Ltd (trading name: Atlas Partners) is a serious concern. The firm handles media enquiries for GambleAware. Yet the charity also uses Atlas Partners as a political lobbyist, the latest statutory Register of Consultant Lobbyists reveals. The charity website fails to disclose the firm’s function as political lobbyist. Given how close GambleAware is to the gambling industry, there’s an urgent need for the charity to prove that it isn’t actually lobbying for the industry. Finally, the composition of the board contravenes GambleAware’s stated policy on the proportion of trustees from the gambling industry.
- GambleAware, formerly called the Responsible Gambling Trust (registered charity number: 1093910), is a national charity “committed to minimising gambling-related harm.” It does this by funding research, education and treatment services. Funded itself by donations from the gambling industry, the self-styled independent charity works closely with the industry – too closely for critics. In a move to bolster independence and credibility, GambleAware appointed an independent chair, Kate Lampard, in June 2016. Unlike predecessor Neil Goulden, Ms Lampard has no known links with the gambling industry. Last November the charity published its new five-year strategy, which aims, among other things, to treble the number of people treated each year who suffer from gambling-related harm.
- There’s a glaring omission in the new strategy: the fundraising chapter, 6, fails to mention donation of services. It covers donation of money only. We know, though, that GambleAware receives donated services, according to the latest accounts, for financial year ending 31 March 2016 (and in previous years). More about the inadequate financial reporting of the donated services in a moment. But first I must explain why the omission in the new strategy is such a concern.
- Donation of services is fundamentally different from donation of money, conceptually and operationally. For any charity, both have their own advantages and disadvantages. GambleAware openly and readily acknowledges that it needs to counter the perception that it’s too close to the gambling industry. But a company donating services is necessarily nearer to the charity than a simple money donor, which is more removed. Clearly, GambleAware needs to be particularly careful about what companies it accepts donated services from and how, if it’s to uphold its independence and credibility.
- So what companies did the charity receive donated services from, according to the latest accounts? Unfortunately, the reader isn’t told; but there’s an itemised breakdown of the three gifts in kind: boardroom hire £11 000; exhibition space £5 000; and software £558. To its credit, GambleAware promptly identifed the three companies on request. Law firm Gordon Dadds LLP made its boardroom available for the regular meetings of the board of trustees, while events company Clarion Events Ltd gave the charity a free stand at the ICE exhibition, an event for the gambling industry. But working with both organisations in this way raises serious questions about the charity’s independence and credibility.
- Betting and gaming is a speciality of Gordon Dadds, as its website makes clear. There it trumpets its “involvement in the ongoing modernisation of the UK’s gambling laws,” which “means we have unrivalled knowledge of the latest developments…” (http://www.gordondadds.com/service/gaming-betting/) By accepting the gift in kind from lawyers for the gambling industry, GambleAware risks undermining its independence and credibility.
- It’s a shame, too, that the latest accounts don’t disclose Gordon Dadds as source. The lack of transparency invites suspicion: is the charity trying to hide the role of the law firm?
- On gaming, Clarion Events isn’t only responsible for the ICE Totally Gaming event, as its website makes clear. There it proclaims: “Clarion Events occupies a unique position in the [gaming] sector, providing the full range of services to the entire spectrum of the global industry including exhibitions, conferences, technical training, research and digital information.” (http://clarionevents.com/sectors/gaming/) So again, by accepting the gift in kind from an events company so involved with the gaming industry, GambleAware risks undermining its independence and credibility.
- And again, the failure in the latest accounts to disclose Clarion Events as source is disappointing.
- In another revealing omission, the list of supporters on the charity website shows donors of money only: neither Gordon Dadds nor Clarion Events appear in the 2015-16 list (Figures 1-2). Iain Corby, Director of Operations and Development at GambleAware, agreed in an email that donors of services, too, should appear in the list. He added: “I will raise this with our fundraising director as a suggestion.”
- Though GambleAware defended its failure to consider donation of services in the new strategy: the “vast majority” of donations are of money, said Mr Corby, “donations in kind are not at all material at present so did not merit mention in our strategy.” Nevertheless covert, back-room arrangements don’t engender trust and confidence. The charity simply can’t afford to be perceived as being too close in any way to the gambling industry. GambleAware should therefore surely be open and transparent about BOTH fundraising routes.
- But it isn’t just the new strategy that’s deficient in this way. The donation form on the website is for donation of money only. And there isn’t a separate form for donation of services. Again, the charity’s reputation can only be enhanced by making the process to donate services clear and transparent. Hiding the process, whatever it actually is, only invites suspicion.
- The presentation of the donated money in the latest accounts, too, is inadequate. There isn’t an itemised breakdown this time: the reader is unable to see which company has given what. This inadequate disclosure is even worse in light of Ms Lampard’s recent interview in the FT newspaper, headline: “Gambling companies ‘taking the mickey’, says charity chief”: https://www.ft.com/content/9f6440fe-9b93-11e6-8f9b-70e3cabccfae. (Published in the print edition: 29 October 2016.) There the new chair lambasted unidentified companies for failing to give as much as the charity believes they should. Well, we just have to take her word for it. Here the list of supporters on the website doesn’t help either, as donation size isn’t disclosed. I don’t understand why the donation form doesn’t ask for permission to publish donation size. The data should surely be public. Why is the charity acting against the public interest by failing to publish the donation sizes?
- In response, Mr Corby said in an email: “it would be exceptional for a charity to publish the amount of individual donations.” Yet GambleAware does already – for donated services, as money equivalents (see para 5). The charity’s case for more support from the gambling industry would be more convincing if the data were public: that way anyone could see the donation sizes for themselves. Also, this transparency would bolster the charity’s independence and credibility.
- Something else to notice in the FT report: there Jim Mullen, chief executive of bookmaker Ladbrokes, rejected claims that the fixed odds betting terminals in high street betting shops are dangerous or addictive. He was responding to concerns about the notorious machines raised in part by Ms Lampard in the interview. Since then Mr Mullen has become a trustee of GambleAware! His appointment to the board in January is only the latest manifestation of the close ties between the gambling industry and the charity.
- Then there’s the fact that Ms Lampard is paid in her role – a lot. Remember: most charity trustees are volunteers. She works six days a month as chair of trustees, Mr Corby told me in an email. In January 2016, the post was advertised in The Sunday Times newspaper with a salary of c. £30 000 pa for this number of days a month: http://appointments.thesundaytimes.co.uk/job/449842/chair/. Yet Ms Lampard receives nearly 70 per cent more – £50 000 pa. Her fat-cat salary is revealed in the minutes of the board of trustees’ meeting that took place on 5 May 2016. (GambleAware publishes board minutes on its website.) £50 000 pa for six days a month is equivalent to £183 333 pa full-time, if the average number of working days in a month is 22. The full-time figure is well above £150 000, then, the government threshold for “high earners” in the public sector; the Cabinet Office names all such individuals.
- On Ms Lampard’s high pay, Mr Corby said in an email: “Trustees received advice that the likely market rate for the appropriate candidate would be in a range of £30 000 to £50 000 for up to six days a month. During the recruitment process, it became clear that it would be necessary to pay up to £50 000 to attract the skills, experience and public reputation required. The Charity Commission were asked for and gave its permission for the payment of a trustee to act as chair in full knowledge of the amount involved.” Still, Ms Lampard is paid proportionately more than the prime minister – and most charity trustees are unpaid.
- GambleAware commendably publishes a trustee register of interests on its website. In further good practice, the charity asks trustees to declare “their interests in general (not only those with a potential for a conflict of interest).” And each trustee must also declare the interests of “close relative/household members.” So it’s disappointing that Ms Lampard fails to disclose in full personal interests. She’s declared “none” for the interests of “close relative/household members” (Figure 3). According to Who’s Who 2017, the chair is married to Hon. John Leigh-Pemberton. He’s a vice president of national charity The Country Trust (registered charity number: 1122103) (Figure 4). His position there should surely be disclosed by Ms Lampard.
- In response, Mr Corby said in an email: “Trustees are required to declare relevant potential conflicts of interests in line with Charity Commission guidance which is provided to them all upon appointment (https://www.gov.uk/government/publications/conflicts-of-interest-a-guide-for-charity-trustees-cc29/conflicts-of-interest-a-guide-for-charity-trustees). The Country Trust’s website states that ‘The Country Trust help children to learn and experience food, farming and the countryside‘. I find it very hard to imagine a situation where GambleAware would in any way have dealing with this Trust.” Perhaps, but that’s not the point. GambleAware trustees should declare “their interests in general (not only those with a potential for a conflict of interest),” according to the online trustee register of interests.
- The role of Atlas Communications Partners Ltd (trading name: Atlas Partners) is a serious concern. The firm handles media enquiries for GambleAware (Figure 5). Yet the charity also uses Atlas Partners as a political lobbyist, the latest statutory Register of Consultant Lobbyists (October to December 2016) reveals. The charity website fails to disclose the firm’s function as political lobbyist. Although the published board minutes document last year’s appointment of Atlas Partners, they don’t explicitly refer to political lobbying, either. Given how close GambleAware is to the gambling industry, there’s an urgent need for the charity to prove that it isn’t actually lobbying for the industry.
- On the hidden lobbyist, Mr Corby said in an email: “I do take your point that, because we only list Atlas as a contact number for journalists, our website may not make it clear that Atlas have a wider brief than just media management, so I will add something to that effect.” He added: “GambleAware does not lobby on behalf of the gambling industry. Atlas Partners does not work for any gambling industry organisations, because these would be considered a conflict with their work for GambleAware.” So that’s alright then. Nevertheless Ladbrokes’ Mr Mullen isn’t alone on the board: half of the current trustees, five of the ten, hold senior positions in the domestic gambling industry! What’s more, the composition of the board contravenes GambleAware’s stated policy of “maintaining only a minority of trustees with any direct interest in the gambling industry” (trustees’ annual report with the latest accounts).
- ACKNOWLEDGEMENT: I’m grateful to Iain Corby, Director of Operations and Development at GambleAware, for being responsive and willing to engage in discussion.
- On 13 August 2015, I had a letter published in the Financial Times on the closure of the charity Keeping Kids Company (registered charity number: 1068298), known as Kids Company, and the need for celebrities who get involved with charities to be accountable.
- It’s available on the newspaper’s website [dated 12 August 2015] – behind paywall: http://www.ft.com/cms/s/0/718d861a-404d-11e5-9abe-5b335da3a90e.html.