A religious charity has been criticised for a spending spree on expensive foreign trips and a significant salary hike for its leaders, shortly after selling its central London church building for £8m.
The proceeds of the 2016 property sale by the Everlasting Arms Ministries “represented a significant increase in the charity’s income” according to a Charity Commission, which launched an investigation three years later amid concerns over financial controls and management.
This probe found that the charity’s “poor financial management planning meant that it had spent a significant portion of the proceeds of the property sale despite a decrease in other income”.
Between 2016 and 2018 it emerged that the charity spent more than £450,000 on “international outreach”, which included business class travel, five-star hotels as well as payments to partner organisations in China and India.
Because of the charity’s “poor record keeping and financial controls, trustees were unable to demonstrate that all its funds had been spent solely for exclusively charitable purposes”, said the regulator.
Concerns are also raised around a hike in salaries, for the charity’s chief executive, who is also its senior pastor, as well as his wife, who is deputy CEO and deputy senior pastor, following the sale of the prime central London property.
His salary increased from £44,536 to £72,000 a year. Meanwhile, his wife’s salary rose from £45,000 to £54,000.
While the senior pastor resigned as a trustee in 2020 he remains the charity’s chief executive. His wife, who had been a trustee for five years until 2006, is still also employed at the charity.
The previous trustee board had four trustees and there are currently five trustees at the charity.
Among concerns was a business class flight for the charity’s deputy senior pastor from London to Ghana that cost £2,580. A charity employee also travelled, but via economy class at a cost of just £548.
In total more than £181,000 was spent by the charity on business class travel between 2015 and 2020.
The charity’s trustee board in 2016 said that “traveling on a mission…can be cumbersome” and that directors and trustees should be “comfortable when travelling” and “should fly business class”.
“Trustees must consider value for money when requiring trustees or employees to travel on behalf of the charity and ensure charity funds are spent in furtherance of the charity’s objects and in the best interest of the charity,” according to the Charity Commission’s investigation.
The property deal looked at saw the charity sell the property to a developer but continue to occupy the building.
The charity’s previous trustee board was found to be responsible for serious mismanagement and/or misconduct in their running of the charity. “How they governed and managed the charity prior to the Commission’s intervention falls well below the standard that the Commission expects,” said the Commission.
But as the previous and current trustee board have cooperated with the inquiry and implemented an action plan of improvements no further action will be taken, added the Commission, although the charity will continue to be supported by an independent financial advisor and be monitored by the regulator.
We've secured improvements at The Everlasting Arms Ministries.— Charity Commission (@ChtyCommission) June 14, 2022
Our inquiry found the previous trustee board failed to have appropriate financial controls in place to manage funds from the sale of the charity's property.
Read more: https://t.co/rwYLyUhbZg pic.twitter.com/kYZhVdhICk
Charity Commission head of investigations Amy Spiller said: “It is essential that charities have robust financial management in place so the public can trust that all its funds are used in furtherance of charitable objectives.
“With The Everlasting Arms Ministries, a sudden increase in income highlighted failures by its then trustee board to have adequate policies and governance in place.
“In order to prevent further mismanagement, our inquiry had to intervene to freeze the charity’s bank accounts and issue an Action Plan.
“We are pleased that the current trustees have implemented the Action Plan and are committed to improving the charity’s financial management. We will continue to monitor their progress on this matter."