Here is an interesting Regulatory Case Report from the Charity Commission of England and Wales. It seems in the UK that one can put in on-line applications to be registered as a charity. This report covers how one or more persons put in about 35 false charity applications. 7 of the “charities” were registered and now removed from the charity list.
Here is the press release from the Charity Commission:
The Charity Commission, the independent regulator for charities in England and Wales, has published a regulatory case report into seven organisations.
The organisations were originally registered as charities but, following enquiries, have since been removed from the Register of Charities. The Commission identified common features in the registration of the seven organisations which caused concern about their claims to be charities.
In August 2010 the Commission identified as part of its monitoring procedures, and when corresponding with one of the newly-registered seven organisations, that the address given for the correspondent, also a trustee, was an unoccupied address. Further monitoring work subsequently identified that 35 separate on-line applications to register were made between 16 July and 4 August 2010 from organisations based all over the country. The organisations and/or the details provided to the Commission shared common features, for example, addresses of properties that turned out to be unoccupied addresses, addresses which did not exist, non-operational telephone landlines or mobile telephone numbers, and the same financial information repeated in different registration applications.
As a result of these concerns, 28 registration applications were put on hold pending further enquiries, and further enquiries were also made into the seven organisations which had recently been registered.
Regulatory compliance cases were opened into all seven organisations to examine any inter-relationship between the organisations and whether these organisations were shams or, if not, whether they were capable of operating as charities and whether the trustees existed.
The full report [ http://www.charitycommission.gov.uk/Library/rcr_change.pdf ] is published today on the Commission’s website.
Given the identified connections between the organisations the Commission was concerned that the information provided may be false, and therefore reported its concerns to the police.
The Commission was unable to verify the accuracy of the information which had been provided by the seven organisations at registration despite repeated attempts. The Commission was therefore unable to conclude that these were in fact legitimate organisations set up to operate as charities or that they legally existed.
The Commission removed all seven organisations from the Register of Charities and discontinued the registration process for the other 28 organisations.
Issues for the wider charity sector and the public include that as part of its regulatory role, the Commission sometimes has to consider the possibility that a body which has been registered as a charity is, in fact, a sham. The Commission has a statutory duty to remove from the Register of Charities any organisation which the Commission considers is no longer a charity, and any charity which has ceased to exist or does not operate. The Register of Charities plays an important role in assuring the public of the legitimacy of organisations and promotes transparency of activities and details of charities. It is therefore important for charity details to be updated by trustees on a regular basis.
Should the Commission have suspicions of criminal activity, these are forwarded to the police to investigate.
The full report can be read at http://www.charitycommission.gov.uk
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Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.