Beware being used as ‘vehicles for terrorism’, regulator’s reports warn

The Charity Commission has published papers on two people convicted of using humanitarian aid convoys to fund terrorism in Syria

Charities could be used as “vehicles for terrorism”, according to two Charity Commission reports about cases in which humanitarian aid convoys were used to fund terrorism in Syria.

The reports are about, Syed Hoque and Mashoud Miah, who the regulator says were both convicted on 23 December 2016 of entering into funding arrangements contrary to section 17 of the Terrorism Act 2000.

This is believed to be only the second time the commission has published reports about individuals. They reiterate warnings about how humanitarian aid convoys can be abused for terrorist purposes.

According to one report, Hoque, was a volunteer for the east London community charity Shade. The report says that he used humanitarian aid convoys as cover for his support of another person involved in terrorist activities in Syria.

The charity had provided him with a letter of credential to support activities to help people affected by the Syrian civil war. The report confirms that the commission was in contact with the charity before Hoque’s conviction because the charity operated in a high-risk area.

The report says the charity did not conduct any due diligence on Hoque and failed to establish measures to control or monitor his activities on the charity’s behalf, which the commission considers to be misconduct and mismanagement on the behalf of the charity’s trustees.

The charity was issued with an action plan by the Charity Commission, which the charity has now implemented, the report says.

The other report says that Miah was a supporter of a company called Helping Humanity, which was raising charitable funds but was not a registered charity.

The regulator says in the report that the Helping Humanity it is referring to in the report, which is now defunct, should not be confused with a registered charity of the same name.

Miah also used humanitarian convoys as cover for his support of an individual in Syria, according to the report.

The company claimed to be awaiting charitable status, the report says, but never made an application to join the charity register.

The report says the company was later dissolved after contact with the commission.

The Charity Commission issued a regulatory alert in 2014 about the use of aid convoys in Syria, which warned that they could be abused by terrorists, and called on charities to ensure that all members of a convoy were properly vetted and travelled to and from the country as a group.

The commission has also emphasised that humanitarian aid convoys are an ineffective way of distributing aid, and has warned charities using them that they will be subject to additional regulatory scrutiny.

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Regulators meet online giving platforms to discuss fraud prevention

The Charity Commission and the Fundraising Regulator are meeting representatives from 14 of the biggest operators, including JustGiving and Virgin Money Giving, to agree principles

The Charity Commission and the Fundraising Regulator are meeting senior representatives from online giving platforms to discuss issues such as how to combat fraud.

The meeting, which is taking place today, brings the regulators together with 14 of the biggest fundraising platforms, including JustGiving, BT MyDonate, GoFundMe and Virgin Money Giving.

In a statement, the commission said: “The aim of the summit is to collectively agree some principles that will ensure individuals are supported when setting up or donating to online appeals, help to increase public trust and confidence in charity and online giving, and ensure that charitable resources in the short, medium and long-term are used as effectively as possible.”

The commission said these issues were especially important in the wake of the terrorist attacks in the UK this year and the Grenfell Tower fire, which prompted the public raise to more than £38m for those affected, largely through online fundraising platforms.

But concerns were raised about the veracity of some of the fundraising pages. In April, JustGiving seized control of a fundraising page on its site that purported to have been set up in memory of Aysha Frade, who was killed the previous month in the terrorist attack on Westminster, after users spotted it had been started by a woman who had the same name as someone convicted of fraud.

Attendees at the meeting will discuss how to protect charitable funds from fraud or misrepresentation, how to ensure individuals understand the responsibility they are taking on in setting up a fundraising page and are supported to do so, and how to provide transparent information about fees and the amount of money will go to the platforms themselves.

The meeting will also explore whether the self-regulatory regime set out in the Code of Fundraising Practice was the appropriate way to assure the public and parliament that major giving platforms were adhering to high standards and transparency, the commission statement said.

Online platforms that allow private individuals to collect donations for their chosen causes and share their fundraising appeals with friends and family have become increasingly popular. JustGiving’s chief operating officer, Charlie Wells, predicts that online donations will represent 50 per cent of online giving by 2020.

Jo Barnett, executive director at Virgin Money Giving, told Third Sector the platform was aware of the importance of keeping charitable donations safe.

“The key thing we would like to see progressed through the summit is an understanding of how fundraising platforms can work together to provide greater transparency, minimise fraud and support charities in driving up new income,” she said.

Helen Stephenson, chief executive of the Charity Commission, said the emergence of new crowdfunding and online giving sites had had a positive impact on charitable giving in the UK and she hoped the meeting would allow the organisations involved to build on this success and to identify what steps were needed in the future.

“We want to ensure that the public are sufficiently informed about online giving and can set up appeals and donate with confidence,” she said.

Stephen Dunmore, chief executive of the Fundraising Regulator, said it was important that online platform operators supported both the legal requirements and the good practice set out in the Code of Fundraising Practice.

“We look forward to building good working relationships with the online platforms to ensure that they support the code and can help develop it in future, as well as to assure the public that they can donate safely when they use the platform of their choice,” he said.

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New inquiries tripled last year, says regulator’s annual report

In the year to 31 March 2017, some 187 inquiries were opened by the Charity Commission, compared with 52 in the previous financial year

The number of charities subject to new Charity Commission inquiries more than tripled in the year to 31 March 2017 compared with the previous 12 months, the regulator’s annual report shows.

The report, published today, shows that the number of charities subject to new inquiries rose from 52 in the 2015/16 financial year to 187 in 2016/17, although this figure includes two class inquiries: one into charities that failed to file accounts for two years running and one into charities providing services on Royal Air Force bases.

The two class inquiries each comprised 74 charities. Excluding the long-running “double-defaulter” inquiry and counting the RAF investigation as a single inquiry, the total number of new inquiries opened this year was 40, which was still an 80 per cent increase on the 22 opened the year before, also excluding double defaulters.

The report says there was an increase in the number of “charities being referred for inquiry in order to deal with serious regulatory concerns”.

The report also reveals that the commission used the powers it gained under the Charities (Protection and Social Investment) Act 2016 a total of 26 times, including 18 times in April and May this year.

It says the regulator used its powers eight times in the financial year ending 31 March 2017 and a total of 26 times by 31 May 2017.

The act, which came into force in March 2016, gave the commission new powers to issue warnings to charities and to disqualify people from serving as trustees.

The commission’s annual report says the actions the commission took under the act in the 2016/17 financial year included “directing actions not to be taken and issuing the first notice of our intention to issue an official warning”.

A commission spokeswoman said the sharp increase in the use of the new powers in April and May had occurred partly because more of the powers became available at that time and partly because of cases such as that of the Anatolian People’s Cultural Centre, where five trustees were disqualified, which would count as five separate uses of the power.

In 2016/17, the commission opened 503 monitoring cases, up from 462 the previous year, and concluded 586, up from 426.

The number of applications to register a charity rose from 8,198 to 8,368, and 6,045 were successful, an increase from 5,169. Of these, 131 applications were formally rejected by the commission, an increase of 90 on the previous year.

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GDPR will bring 50 or 60 changes to code, says regulator’s head of policy

Gerald Oppenheim of the Fundraising Regulator says the General Data Protection Regulation, due next year, will have to be written into the Code of Fundraising Practice at some point

The introduction of the General Data Protection Regulation will require 50 to 60 changes to the Code of Fundraising Practice, according to Gerald Oppenheim, head of policy at the Fundraising Regulator.

Speaking at the Institute of Fundraising’s fundraising convention in London yesterday, he said the regulator was working through the code to find out how it would be affected by the GDPR, new European data-protection legislation that is due to come into force in May 2018.

He said updating the code to take the new rules into account would be a complicated undertaking.

“The GDPR will have to be written into the code very clearly at some point,” Oppenheim said.

“We have already started looking through the code at where it refers to data protection, even in the most general sense,” he said. “We’ve found 50 to 60 places where the code needs to change, even where it’s just a wording change or something as simple as that.”

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He said the regulator was waiting for the Information Commissioner’s Office to issue its final guidance on the GDPR after it ran a consultation on draft guidance throughout March.

“We’re still waiting for that consultation document to be turned into further guidance from the ICO,” Oppenheim said. “That will obviously affect how we change the code.”

He said he did not expect to be ready to reveal the code changes to the sector until later in the summer.

During the same session, Daniel Fluskey, head of policy and research at the IoF, said the umbrella body would not be releasing guidance telling charities whether or not to change their policies on communication to opt-in only.

Each charity would have to make the decision for itself based on its individual circumstances, he said.

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Regulator’s consultation on charging charities won’t start for at least 12 weeks

At a public meeting in Cardiff, the chair and chief operating officer of the Charity Commission said the consultation would be published in the near future

The Charity Commission is facing at least a 12-week delay to its consultation on charging charities to fund the regulator.

In response to a question at a commission public meeting held in Cardiff on Thursday, William Shawcross and David Holdsworth, respectively chair and chief operating officer of the regulator, both said that a consultation on a charity levy would be released in the near future.

Third Sector understands that the Charity Commission was very close to publishing the consultation before the general election was called, but the election and subsequent changes in government, including the appointment of a new Chief Secretary to the Treasury and a new charities minister, have delayed the process.

Because of this, it will take at least 12 more weeks to get the necessary permissions from the Treasury to launch the consultation.

Speaking at the public meeting, Holdsworth said he expected that charities with incomes of £100,000 or more would have to pay between £75 and £1,750, depending on the outcome of the consultation.

Cuts to the commission’s Treasury funding mean its budget has fallen by £8m since 2010 and will be frozen at £20.3m a year until 2020. The number of registered charities has increased since 2010.

Shawcross said the commission had consistently asked for more funding, but was resigned to exploring other ways of getting the money it needed.

“I have asked the Treasury for more money consistently, almost monthly, for the past few years and the answer has been no,” he said. “I have said that, in that case, we will try to seek money from elsewhere.

“We have been discussing this with government, but there have been a lot of tos and fros because there have been a lot of changes in government over the past year and a half. It has not got off the ground quite as quickly as I would have wished.”

Holdsworth said: “Exploring the options – with the sector – is the right thing to do. We did try to get the increase and got a very robust no from the Treasury. So at that point our duty as a regulator has to be to explore all options.

“That doesn’t mean we will give up on pursuing the Treasury for more assistance, but it means our responsibility is to pursue those options.”

Holdsworth also set out some of the changes to the Charity Commission’s digital services that will be occurring in the next year, which have been funded by a one-off grant from the Treasury or £8m.

Holdsworth said that much of the commission’s work had so far been focused on building the infrastructure and capacity among its staff to deal with new digital services.

Charity registration services have already gone online, so the average amount of time it takes to register a charity has halved from 90 days to 45.

A consultation on changes to the annual return, which closed in March, would also lead to a new user-friendly version being launched on 31 August, Holdsworth said.

He added that two new digital services were currently in “private beta”, which meant they were being tested with a number of charities.

He said these two services were applications to change a charity’s name – which he said could cut the length of time spent on the process from 33 days to 24 hours – and amending a charity’s governing documents.

He added that individual “portals” for charities, which would allow them to make applications to the commission and take control of their details, should be ready by the end of this year.

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