Uncertainty remains after Cage appeal withdrawn

Withdrawal of advocacy group Cage’s judicial review into the actions of the Charity Commission means there remains a lack of clarity on how far the regulator’s powers stretch, according to a think tank.

Cage pursued a judicial review after the commission sought assurances from The Roddick Foundation and The Joseph Rowntree Charitable Trust that they were no longer funding the organisation and had no intention of doing so in future.

The intervention followed Cage becoming the subject of controversy and negative media coverage over research director Asim Qureshi’s public statements about Mohammed Emwazi, believed to be the ISIS militant popularly known as ‘Jihadi John’.

The review was withdrawn after all parties reached a settlement. But New Philanthropy Capital chief executive Dan Corry said the case had the potential to provide helpful clarity on the extent of the commission’s powers.

“While the commission must have a role in ensuring that charitable funds are used in appropriate ways, it is unclear exactly what that means, how the commission should reach these sorts of decisions, and what enforcement powers they can legitimately use.”

Corry said although there had been some learnings from the case, stopping the process meant “things will remain rather foggy” on when and why charities might come under scrutiny.

JRCT participated in the case as an interested party, and yesterday published the settlement agreed by the parties. It read:

“Trustees must be free to exercise their fiduciary powers and duties in the light of the circumstances that exist at the time, if acting properly within their objects and powers and in the best interests of the charity. The Charity Commission does not seek to fetter charities' exercise of discretion whether to fund the charitable activities of Cage for all time, regardless of future changing circumstances.

“The commission recognises that it has no power to require trustees to fetter the future exercise of their fiduciary duties under its general power to give advice and guidance. In consequence, there is no obligation on the trustees of JRCT to fetter the proper and lawful exercise of their discretion in future.”

Commenting on the case NCVO chief executive Sir Stuart Etherington said it is important both trustees and the regulator have “absolute clarity” on the parameters of their roles.

“This case has provided useful clarification and is a welcome recognition of the independence of charity trustees.”