Regulator disqualifies trustees after finding serious mismanagement at Fashion for Relief
The Charity Commission has today (26 September 2024) published the report of its statutory inquiry into Fashion for Relief, concluding the charity was poorly governed and had inadequate financial management.
As a result of its findings, which included multiple instances of misconduct and / or mismanagement, the Commission took action to disqualify three individuals from trusteeship (Bianka Hellmich for nine years, Naomi Campbell for five years and Veronica Chou for four years), recovered over £344,000 and protected a further £98,000 of charitable funds. These funds were used to make donations to two other charities and settle the charity’s outstanding liabilities.
Fashion for Relief, which has been removed from the register of charities, was set up for the purpose of poverty relief and advancing health and education by making grants to charities or other organisations and by giving resources directly to those affected.
The inquiry found that between April 2016 and July 2022, only 8.5% of the charity’s overall expenditure was on charitable grants. The inquiry saw no evidence that trustees had reviewed the charity’s operating model to ensure fundraising methods were in the charity’s best interest and costs were reasonable relative to income generated. It also found some of the charity’s fundraising expenditure was not reasonable.
The charity had held fundraising events for the Save the Children Fund and the Mayor’s Fund for London. The inquiry found that the trustees of Fashion for Relief failed to manage these partnership arrangements. Interim managers appointed by the Commission made payments to these two charities before the charity was wound-up.
The inquiry also found that unauthorised payments totalling £290,000 for consultancy services had been made to a trustee, Bianka Hellmich, which was in breach of the charity’s constitution. Whilst Ms Hellmich had proactively proposed repaying these funds, the Commission-appointed interim managers secured repayments to the charity.
Additionally, the inquiry found that the charity’s funds were held and applied on its behalf by external professional advisors (solicitors and accountants) rather than in a dedicated bank account in the charity’s name. After the Commission investigated transactions made under this arrangement, £54,000 was recovered to the charity from one professional advisory firm. These transactions were not identified or challenged by the trustees at the time.
Charity Commission Deputy Director for Specialist Investigations and Standards, Tim Hopkins, said:
Trustees are legally required to make decisions that are in their charity’s best interests and to comply with their legal duties and responsibilities. Our inquiry has found that the trustees of this charity failed to do so, which has resulted in our action to disqualify them.
This inquiry, and the work of the interim managers we appointed to run the charity in place of the trustees, has resulted in the recovery of £344,000 and protection of a further £98,000 charitable funds. I am pleased that the inquiry has seen donations made to other charities which this charity has previously supported.
The report detailing the full findings, regulatory actions and conclusions of this inquiry can be found on gov.uk.
ENDS
Notes to editors
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The Commission publishes a range of guidance to help trustees understand their responsibilities under charity law, including 5-minute guides to decision making and on managing charity finances.
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The Charity Commission is the independent, non-ministerial government department that registers and regulates charities in England and Wales. Its ambition is to be an expert regulator that is fair, balanced, and independent so that charity can thrive. This ambition will help to create and sustain an environment where charities further build public trust and ultimately fulfil their essential role in enhancing lives and strengthening society. Find out more at About us - The Charity Commission - GOV.UK (www.gov.uk)
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