The regulator for charities in England and Wales has investigated a number of fundraising appeals on Birmingham based Radio XL.
The Asian commercial broadcaster, which is managed by Dr Arun Bajaj has had a number of concerns raised by various charitable organisations.
In 2002 the Charity Commission was informed that Radio XL had not released all of the funds raised through several appeals, broadcast in 2001, on behalf of a charity called Divine Onkar Mission (DOM).
These particular appeals were for victims of cyclones in the Indian state of Orissa, and the funds were to be released in tranches to DOM for relief projects that were being undertaken in phases.
An inquiry by the Commission in 2002 found that the funds that Radio XL had released to DOM had been properly applied for the declared purposes of the appeals but that Radio XL had not released almost 30,000. The Managing Director of Radio XL explained that this was due to a misunderstanding, and that the remaining funds would shortly be released.
Furthermore, DOM۪s trustees maintained that they had provided Radio XL with adequate progress reports on a project to build a school, but Radio XL’s Managing Director told the Commission that in his view the cost estimates for the work had been too high, and consequently he did not consider it prudent to release the funds.
DOM continued to negotiate with Radio XL about what evidence of progress should be produced to approve the release of funds, but despite this the situation remained unsatisfactory.
In 2005, DOM۪s trustees complained to the Commission that Radio XL۪s Managing Director had promised on several occasions to release funds but did not in fact do so. On one occasion, it was claimed, Radio XL handed over a “dummy” presentation cheque for 21,000 to DOM at a fundraising event, but that Radio XL did not honour it.
DOM also informed the Commission that Radio XL had broadcast further appeals since 2001, but it had been unable to obtain any information from Radio XL about how the proceeds of those appeals had been spent.
At the time of filing this article, Radio XL۪s Managing Director failed to respond satisfactorily to the Commission۪s requests for documents and information and so a second formal inquiry was opened in order to investigate more fully the concerns about the charitable funds.
The inquiry found that substantial sums of money raised through three of Radio XL’s broadcast appeals remained on deposit at the bank some considerable time after the appeals had closed:
The unreleased sum of 29,900, raised for the Orissa appeal, had been deposited in October 2002 and by the middle of 2006 interest earned had taken the balance in the account to over 32,000. In August 2006 Radio XL released 21,000 of the Orissa appeal funds to DOM, leaving a balance of some 11,500 retained by Radio XL;
Proceeds from an appeal in 2001, which the Managing Director explained to be in response to an earthquake disaster in Gujarat, generated more than 84,000. These funds also remained on deposit at the bank and by September 2007 had risen to some 95,000;
Some 15,800, more than half of the proceeds of Radio XL۪s 2005 Asian Earthquake Appeal, had not been paid over by September 2007.
Radio XL۪s Managing Director told the Commission that the delays in releasing funds had occurred because of his strong desire to ensure that money is spent wisely and not wasted.
He said that, although longstanding agreements were in place for the application of the appeal funds, he needs to be satisfied that projects for which funds were reserved are properly planned and supervised before he is prepared to release appeal funds.
However, the Managing Director persistently did not cooperate with the inquiry beyond providing this limited information. This impeded the Commission۪s inquiry. His lack of co-operation continued until further regulatory action, in the form of an order to transfer the money to another charity, to spend in accordance with the purposes of the appeals, was proposed.
The inquiry concluded that Radio XL and its Managing Director had failed, without reasonable excuse, (1) to apply some of the appeal funds promptly for the purposes for which they were given; (2) to comply with the Commission۪s reasonable requests for information, including to obey a Direction under the Act; and (3) to provide proper accounts of the appeals funds. This constituted mismanagement in the administration of the appeal funds.
The inquiry concluded that a proper application of the funds would best be achieved by their transfer by an order, using powers in section 18 (2) of the 1993 Act, to a registered charity having the operational infrastructure to provide the kind of relief for which the funds were donated, unless they were applied by Radio XL before the scheme was established.
In August 2007 the remaining Orissa appeal funds of some 11,700 were paid over to Divine Onkar Mission. In October 2007 the other appeal funds, totalling nearly 111,000, were paid over to the Ayra Samaj Gandhidham Charitable Trust, based in India, to be applied towards the cost of construction of two orphanages, one located in an area affected by the Gujarat earthquake disaster and the other located in an area affected by the Tsunami.
The Commission has given advice to the Managing Director on how to structure and manage any further charitable appeals. The Commission has every reason to expect that this will be followed.