Islamic Relief Worldwide is embroiled in a court battle with its US affiliate after a breakdown in relations, documents reveal.
IRW’s latest accounts, published this week, show the charity’s income fell by £36.7m in 2025 to £234.8m due to the previous year including “exceptionally large emergency appeals and unusually high levels of donor response”.
The accounts say income returned to a “more typical level at a time when many supporters were facing cost-of-living pressures and increased demands from multiple global crises”.
They say: “As a result, fewer projects could be funded and delivered during 2025, even though humanitarian needs remained extremely high.”
The charity says it supported more than 13 million people around the world through humanitarian aid, long-term development programmes and advocacy.
But the accounts also note that after the end of the reporting period, Islamic Relief USA began legal proceedings against IRW “in relation to matters arising from the parties’ historical relationship and associated activities”.
It came after IRUSA faced warnings from US authorities that its non-profit status was under threat if it maintained links with IRW.
In October last year, IRUSA told IRW that it would be ending their partnership in order to protect its non-profit standing in the US.
But IRUSA then accused IRW of trying to solicit donations from US donors, which IRUSA claimed violated brand licensing agreements, and said IRW had falsely claimed that IRUSA had abandoned hundreds of sponsored orphans by cancelling their aid benefits.
In March, IRUSA filed a federal lawsuit against IRW, seeking a judicial order to cancel all remaining contracts and operational links with IRW.
The IRW accounts say the charity disputes the claims and has applied to have the dispute resolved in accordance with the dispute resolution provisions contained in the parties’ agreements.
In July, a judge put a hold on court proceedings and told the two sides to pursue a contractual dispute resolution process.
The IRW accounts say that having considered legal advice available at the date of approval of the financial statements, its trustees had concluded that no funds should be set aside.
“The proceedings are at an early procedural stage, and the outcome cannot presently be determined with certainty,” the accounts say. “The position will continue to be monitored and reassessed as the matter progresses.”
A spokesperson for IRW said the charity strongly rejected the claims made by IRUSA and welcomed the court’s decision telling the parties to go through dispute resolution.
“Islamic Relief Worldwide has always maintained throughout these proceedings that any issues of dispute between the parties should never have been litigated in court,” the spokesperson said.
“We now hope to work with Islamic Relief USA to resolve any outstanding matters through that process, in the good-faith, collaborative spirit both organisations committed to.
“Islamic Relief Worldwide continues to believe that the millions of rightsholders who depend on the Islamic Relief family are best served when that family combines its resources, works at scale, and stands together — and our focus remains, as it always has, on the vulnerable people around the world who depend on our work.”
A statement from Islamic Relief USA, issued after the court ruling in July, said: “While the court’s ruling was strictly procedural and did not address the merits of our claims, we welcome this order as a positive step toward resolving our dispute through sensible good faith negotiations, which we have consistently sought.
“By mandating engagement, we hope and trust that this decision will lead IRW to finally address our critical transparency and compliance concerns, safeguarding our institutional independence and autonomy.”