The Charity Commission has closed its regulatory compliance case into the humanitarian aid charity Penny Appeal, months after it issued an official warning about the organisation’s records and financial accounts.
It comes after the Fundraising Regulator found that Penny Appeal committed five breaches of the Code of Fundraising across three of its programmes, including misleading donors.
In March, the Information Commissioner’s Office said it had issued an enforcement notice to the charity after it sent 460,000 unsolicited texts to 52,000 people over a 10-day period.
The Information Commissioner’s Office said the Penny Appeal “inundated” people with messages, including at night, leading to 354 complaints.
The Charity Commission opened a compliance case into Penny Appeal in June 2020 after it received several complaints and concerns about the charity’s management.
The concerns included a failure to manage perceived conflicts of interest, poor record-keeping and inadequate management of major supplier contracts.
The regulator issued an official warning to the charity in September last year after several meetings with the charity’s trustees and an inspection of its records and financial accounts.
It found that Penny Appeal had failed to maintain proper trustee meeting minutes to record decisions relating to the purchase of a property, consideration of an unsolicited offer received to buy a property and decision about retaining and redeveloping a property.
The charity was also found to have failed to review a contract with its major supplier and had failed to manage a perceived conflict of interest relating to its relationship with its major supplier.
The regulator said today it had closed the case and had secured “several improvements to the charity’s governance” through its intervention, including by advising the trustees to appoint a minute-taker and to record conflicts of interest.
The trustees have set dates to review third-party contracts and have appointed an external consultant to review its existing contracts and advise on best practice, the regulator said.
In addition, Penny Appeal is set to terminate its contract with the major supplier that caused a perceived conflict of interest, the commission said.
The regulator has advised the charity’s trustees to make further improvements to the quality of meeting minutes.
They have also been asked to complete an outstanding review of governance and contractual relationships and agreements with third-party organisations established overseas, as part of an internal action plan set out by the charity’s solicitors.
The commission said it was monitoring Penny Appeal’s progress and had informed the charity that any failure to comply with the outstanding actions could result in further regulatory action.
Tracy Howarth, assistant director for casework at the commission, said: “Improvements have been made at Penny Appeal after several years of engagement about a series of weaknesses and shortcomings in the charity’s governance.”
She said that the charity receives “significant support and donations from the public” so it is “extremely important that its governance is fit for purpose”.
Howarth said: “The actions already taken have strengthened how the charity is run, and we are following up on the outstanding actions, which the trustees have assured us will be promptly addressed.”
A spokesperson for Penny Appeal said: “The decision by the Charity Commission to close its regulatory case into Penny Appeal today is testament to the huge strides we have made to strengthen our governance, processes and procedures.”
They said that the charity remains “fully committed to our journey of ongoing improvement as part of the extensive and independent governance review we commissioned”.