A Foundation set up by the Duke and Duchess of Sussex has been cleared of wrongdoing by the Charity Commission.
But the regulator found that “decisions on spending were not adequately documented”.
In criticising the Foundation’s record keeping, the Commission said this limited “the ability of the trustees to demonstrate the reasons behind” spending decisions.
“The failure to properly record decisions does not represent best practice and is not in line with Charity Commission guidance,” it added.
The Charity Commission had been investigating financial transactions related to MWX Foundation, which was set up by Harry and Meghan in 2019.
The regulator’s investigation centred on an unrestricted start up grant of £145,000 from The Royal Foundation of The Duke and Duchess of Cambridge, formerly The Royal Foundation of the Duke and Duchess of Cambridge and the Duke and Duchess of Sussex.
It also involved a grant of £151,855 from the Royal Foundation to deliver the Duke of Sussex’s Travalyst sustainable travel programme, which was later transferred by MWX to the Travalyst organisation.
The regulator found that “the transfer of funds to MWX was in line with the governing document of the Royal Foundation and allowed under charity law”.
In addition, “the transfer of funds by MWX to Travalyst was also lawful”.
Travalyst could receive charitable funds for the promotion of sustainable travel only, the regulator found, as this is charitable activity in law.
“There was no evidence to suggest that any conflicts of interest between MWX and Travalyst were managed inappropriately,” added the regulator.
We've found that the MWX Foundation (formerly Sussex Royal: The Foundation) did not breach charity law in transferring funds to Travalyst. However, trustees should have done more to document their decision making.— Charity Commission (@ChtyCommission) May 25, 2021
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Charity Commission director of regulator services Helen Earner said: “The public expects charities to make a real positive difference for the people they help or the cause they pursue. Where concerns are raised with us, whatever the charity, it’s right that we examine them and consider the issues carefully.
“In this case we have found that the trustees complied with their duties under charity law, and the transfers of funds between different organisations were in keeping with the charities’ governing documents, with conflicts of interest being appropriately managed.
“The MWX Foundation should, though, have done more to document its decisions, especially regarding the charity’s expenditure on legal and administrative costs.”
Half of funds spent on admin and legal costs
Trustees of the MWX Foundation decided to wind up the charity in July 2020, a year after it was launched. Almost half of its funds have been spent on legal and administrative costs, the Charity Commission found.
Earner added: “We also note that a substantial proportion of funds went into setting up and then winding up a charity that was active for a relatively short period of time. Trustees cannot predict future events when establishing a new charity – circumstances can change after a charity has been set up.
“But all trustees, before setting up a charity, should think about the longer term, and consider carefully whether a new charity is the best way of achieving the intended aims. This helps ensure that set up costs are offset by longer-term impact.