Breast Cancer charity probably not scandalous, contrary to media claims
Breast Cancer charity National Hereditary Breast Cancer Helpline has received a lot of attention today (14th Aug 2017), mostly based on poor quality journalism.
In short, the key message from this story should be "if you run a charity, have a healthy fear of your regulator". However the press has misreported this, so most readers would come away with the impression that the charity is a fraud, or that only a minority of the funds go on the real cause, which is almost certainly misleading.
This case highlights how we tend to look at charities and their finances in the wrong way. SoGive, a social enterprise which enables a data-driven approach to charitable giving, is helping people see a better way to look at this.
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First some facts:
--- Late in 2016, the Charity Commission received powers to issue "official warnings" -- a sort of public telling off -- to charities
--- The Commission issued the first such official warning on 3rd July, which seems to have been picked up by the press today (14th Aug)
--- The charity -- National Hereditary Breast Cancer Helpline -- had paid its founder. While this is a perfectly reasonable thing to do, when someone (founder or anyone else) is a trustee and then receives payment, this requires approval from the Charity Commission, and they had failed to get the right approvals. This is a very widespread mistake, made by several charities.
--- The killer error, which is probably why they have received a public warning, is that the Commission asked them to do some things on 26th August 2016, and by 18th October 2016 they had made some progress but not yet done them all. They clearly need to learn that if the regulator tells you to do something, you jolly well do it.
All this sounds like some well-meaning people who have not been wise/careful enough in following regulations. While it's conceivable that the founder is scamming funds from the charity, it seems overwhelmingly likely that the founder, who has received a mastectomy herself, was *not* being fraudulent.
However the press has given some misleading information about this case. Examples:
--- The BBC news website writes that "A national breast cancer charity is being investigated after its founder paid herself £31,000, in breach of charity law". This suggests that it is illegal for a charity to pay herself, which is not true.
--- The Telegraph (and other sources) make much of the amount spent on "fundraising expenses and other costs" in the 2014-15 accounts, implying that the Commission may have been upset by the large amount spent on fundraising. This is not true -- the warning did not relate to this. In fact, that costs appear to largely relate to a set of charity shops, which the accounts show to (almost) be self-funding. According to the same set of accounts, these shops "also act as community support and information centres, providing support to patients and families affected by hereditary cancer via discussion with volunteers and provision of resources." Which might explain why those costs appear to have been reclassified as spending on charitable activities in the following year. This demonstrates that the superficial reading of the accounts ("only 3% of the charitable funds are actually spent on the real cause") is a misunderstanding.
This charity has yet again been a victim of a widespread problem in the way we look at charities. We tend to focus too much on how much is spent on admin, rather asking better questions. Instead we need to focus on what does the charity achieve, and how much does it cost (overall) for the charity to achieve this. Innovative social enterprise SoGive is gathering the data to help people look at charities in this way (full disclosure: the author of this article is also founder of SoGive)
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Sources/further reading:
Further info about the regulatory powers to issue official warnings:
https://www.gov.uk/government/publications/official-warnings-to-charities-and-trustees-q-and-a
http://www.bwbllp.com/file/charityup-warnings-spr2017-pdf
https://www.civilsociety.co.uk/governance/how-the-chartieis-act-2016-will-affect-the-sector.html
The Charity Commission's actual official warning on the National Hereditary Breast Cancer Helpline:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/624533/Official_warning_National_Hereditary_Breast_Cancer_Helpline.pdf
National Hereditary Breast Cancer Helpline page on Charity Commission website:
http://apps.charitycommission.gov.uk/Showcharity/RegisterOfCharities/CharityWithPartB.aspx?RegisteredCharityNumber=1150183&SubsidiaryNumber=0
National Hereditary Breast Cancer Helpline accounts 2014-15:
http://apps.charitycommission.gov.uk/Accounts/Ends83/0001150183_AC_20150331_E_C.pdf
National Hereditary Breast Cancer Helpline accounts 2015-16:
http://apps.charitycommission.gov.uk/Accounts/Ends83/0001150183_AC_20160331_E_C.pdf
The charity's own website:
http://www.breastcancergenetics.co.uk/
Press articles:
http://www.bbc.co.uk/news/uk-england-40887949
http://www.telegraph.co.uk/news/2017/08/14/breast-cancer-charity-first-given-official-warning-unauthorised/
http://www.derbytelegraph.co.uk/news/local-news/derbyshire-breast-cancer-charity-under-320132