The Charity Commission and the CVT
The Charity Commission is the regulator of charities in the UK. They received numerous complaints about the Camphill Village Trust (CVT) in recent years. They investigated an anonymous complaint that was used by CVT to justify wideranging changes to its governance structures (Part 1 below). They declined to investigate any of the complaints made by the families of learning disabled residents alleging that the charity was in breach of trust towards its beneficiaries (Part 2 below) but pointed complainants in the direction of the High Court. The commission also made statements that contradict claims made by the CVT. In summary, the Charity Commission
- Has requested that the charity addresses potential conflicts of interest and advised that there should be a majority of independent trustees vs co-worker trustees on the Charity’s governing board.
- Has not said or found that co-worker costs were excessive.
- Has reminded trustees that co-worker benefits from charitable activity must be incidental and that the charity needs to be able to demonstrate this is the case. Regarding the size of benefit they suggested as a guidance an equivalent to an employee’s earnings, although this was for trustees to decide.
- Required that people working in the charity needed to comply with accepted safeguarding procedures.
- Has not advised CVT that co-workers are employees.
- Has declined to investigate the CVT for breaches of its Objects as alleged in a legal opinion by a leading charity lawyer, stating that it could not judge on matters of doctrine and ethos whilst nevertheless stating that they were satisfied CVT had considered these adequately. The Commission advised that this matter was for the High Court to decide.
- Has declined to investigate the serious allegation that CVT gerrymandered the voting membership list to produce a majority of members that support its reform plans.
Part 1 - Charity Commission investigates CVT
In 2012, after an anonymous whistleblowing letter about a Co-worker in the Croft the complainant described as "living in luxury". As a part of their investigation, an independent accountant found that Co-worker costs were however not excessive and in fact within budget, even though it could not be ruled out that an individual within the community received excessive benefits. The Commission also reminded trustees of the rule that benefits for volunteers engaged by the charity (other than the charity’s beneficiaries) needed to be incidental as well as reasonable, although they did not prescribe how much that would be in practice since “financial support for Co-workers is entirely the prerogative of the Trustees.”
They also advised that there should be a majority of independent trustees (vs Co-worker trustees) on the governing board. This proposal was put to the charity’s membership in the form of two resolutions that did not pass the vote in the Annual General Meeting of 2012. However, they were passed on the next vote a month later after members received the following letter from CVT:
“You voted against the one, or both, of the special resolutions at the last General Meeting. This letter is therefore formal notice that your removal from Membership will be considered at the Trustees meeting unless you have returned a properly completed proxy form within the required time period supporting or abstaining from both the special resolutions.”
Instead of achieving an appropriate balance to address potential conflicts of interest, there is now not a single Camphill Co-worker on the board where all are now independent. In other words, the charity board has been taken over by external trustees. This was never the intention or a requirement of the Charity Commission. Yet, we now have a group of trustees and a senior management team with barely an understanding of and sympathy for the role of Co-workers in the Camphill Village Trust.
The Charity Commission has published this part of their involvement with CVT in a report in February 2014.
Part 2 - Families complain but Commission declines to investigate CVT
In 2013, the Botton Village Families Group (BVFG) and in 2014, the Delrow group of parents made two substantial complaints about CVT Trustees and their restructuring plans, in addition to numerous similar complaints by other parents, by Action for Botton and coming from members of the public. All were concerned that the changes being implemented by CVT were against the well known charity’s founding principles and intentions and constituted a breach of its Objects and Powers as laid out in its Memorandum and Articles, which are not only morally but also legally binding:
Objects: “in accordance with the principles of Dr Rudolf Steiner (as summarised in the appendix) … particularly (without limitation) by the establishment and maintenance of communities … or other types of social and/or educational community, in which beneficiaries live and/or work and/or to which they otherwise resort, in community with persons providing support.”
Powers: “recruit and appoint community members to act as Co-workers for the benefit of beneficiaries and provide such Co-workers and their dependants with accommodation, food and support to meet their other personal and family needs, as the Trustees shall from time to time determine, in accordance with the principles of Dr Rudolf Steiner (as summarised in the Appendix to this Memorandum)”
Rudolf Steiner: “Social life in Camphill Communities is based upon a threefold arrangement reflecting the recognition of the human being as comprising body, soul and spirit. This arrangement is expressed in the exercise of freedom in the spiritual/cultural domain; the safeguarding of equality in the realm of rights and responsibilities; and the practice of brotherliness in the economic realm. By application of these principles Community members are bound together by will and personal commitment, not by legal constructs, meaning, for beneficiaries, any form of compulsion and for Co-workers the rights and obligations of contract.”
The complaints also included the concern that CVT was gerrymandering the membership list, and concerns about governance, financial and reputational issues. The parents’ concerns were well documented and evidenced, yet the Commission repeatedly declined to investigate and rule on these, even when backed up with a substantial legal opinion by the country’s leading charity lawyer Hubert Picarda QC which could not be clearer that trustees were in breach of trust and the charity’s founding document.
The Commission however wrote that it did not advice CVT that Co-workers were or should be employees, which is worth pointing out as CVT’s CEO Huw John repeatedly claimed in public that the Charity Commission said that Co-workers must become employees and that it was the law. In other words, CVT effectively lied to the public about their justification for their controversial changes.
We will look at the complaints by the Botton and Delrow groups in more detail in the following paragraphs.
Complaint by Botton families
Already before CVT's monumental announcement of 13 May 2014 there was worrying evidence that the charity was moving increasingly further away from the intentions laid out in the Memorandum, i.e. away from shared family life with the villagers and by marginalising co-workers. With their letter of 13 May it became clear that this was CVT’s policy and had been for some years.
There had been many complaints forwarded to the Charity Commission about the actions of CVT’s trustees and senior management. These include letters from individual relatives and friends, a group of concerned relatives, and lawyers on behalf of relatives.
To indicate the extent of concern: one group of relatives have sent an official complaint, a notice of dissatisfaction at the outcome and a second complaint, two requests for documentation under the Freedom of Information Act, a Customer Feedback Form and numerous subsequent questions. The request attached to the Feedback Form reads:
“Please find enclosed the completed Customer Feedback Form together with our letter of Complaint No 2 to the Commission and a spreadsheet explaining the changes that CVT are undertaking and the irreversibly detrimental impact these will have on our loved ones who have chosen to live in the Camphill Botton Village with volunteer co-workers. We hope that the Commission will at last wake up to the desperate situation our relatives are in and bring the Trustees and senior management to account.”
From this it will be seen that the Commission views CVT not as it would other charities but states that “the Commission cannot arbitrate in disputes about doctrine or ethos”. By making this comment it absolves itself of any responsibility. It states that it relies upon the information provided from the charity and even if necessary it does not have the resources to investigate, finally stating in January 2015 that “The Commission will not be launching an investigation into the charity.”
In a 2014 Public Accounts Committee Report MPs stated “It is clear that the Charity Commission is not fit for purpose”, that it too willingly accepted charities’ versions of events.
However, there is light. This has not put an end to dialogue with them, and their most recent response “The question of whether the status of an individual is that of an employee or a co-worker is not a matter of charity law, and as such is not something that we can comment on” nailed the lie of CVT’s repeated claim that the Commission had advised them that co-workers must be employed.
In the face of waht can only be called lies and deception by CVT, incontrovertible evidence of which has been given to them, the Commission have so far stuck to their line of no investigation. However, by continuing to raise questions about the misdeeds of CVT, as they become clearer, with the Commission we believe that they will have no option but to take the trustees and senior management to task.
Correspondence relating to complaints from Botton families:
18 September 2013 - a group of Botton parents made a substantial complaint about CVT to the Charity Commission, largely centred on the "Departure from the Memorandum of Association ‐ CVT has departed significantly from the Memorandum by deliberate and admitted actions ultra vires and is intending to depart further, by implementing a recent review that takes no account of the Charity’s Objects." Link
1 November 2013 - the Charity Commission responds. Link
14 July 2014 - further response by the Commission Link
19 August 2014 - Dr. S. Larkin wrote to the Charity Commission Link
14 October 2014 - Brian Knight, father of a Botton resident, wrote to the Commission Link
25 November 2014 - the Commission responds Link
27 November 2014 - Max White wrote to the Charity Commission Link
14 December 2014 - the Commission replies Link
15 December 2014 - Max White responds Link
23 January 2015 - relatives wrote to the Charity Commission:
"CVT are now proceeding with their intention, as advised in our letter to the Commission of the 14th May 2014, to evict all the vocational co-workers at Botton by the end of this financial year. CVT’s justification for doing so is 'This is because they do not accept that they are employees although legal advice from both the Charity Commission and HMRC has confirmed that this is the case.'
In the case of the HMRC they have confirmed that they have made no such determination. The sole justification for CVT’s actions therefore focuses on their statement that the Charity Commission has provided legal advice that the co-workers are employed. We would be grateful if you would confirm, by return, whether or not the Commission has provided to CVT the legal advice, that volunteer co-workers are employees, that they claim." Link
4 February 2015 - the Charity Commission reponded:
"You have asked us to confirm whether or not the Commission has provided legal advice to CVT that volunteer co-workers are employees. I can confirm that we have not done so. The Commission does not give direct legal advice to charities. The question of whether the status of an individual is that of an employee or a co-worker is not a matter of charity law, and as such is not something that we can comment on." Link
Complaint by Delrow families
The Charity Commission has, as we have seen, insisted that it cannot rule on whether the Camphill Village Trust (CVT) is upholding the principles of Rudolf Steiner embedded in the Camphill movement.
In its latest response to lawyers it also clarifies that its decision not to launch an inquiry into alleged breaches of trust by CVT does not imply that the charity is acting in accordance with the principles of Rudolf Steiner as set out on the charity's governing document.
The Commission had previously appeared to endorse CVT’s assertion that its controversial policies were in keeping with Steiner principles by saying that it was satisfied that CVT had taken “full account” of these in implementing its controversial policies of effectively eliminating the core Camphill principles of life-sharing and the vocational co-worker model at its nine communities.
As a consequence, in 2014, lawyers acting for the Delrow community had asked the Commission to take a fresh look at its previous decision not to investigate alleged breaches of trust by CVT, set out in a powerful legal opinion by Mr Hubert Picarda QC, one of the country's leading experts on charity law. The Charity Commission has said it will not institute such an inquiry.
In its latest response the Commission is at pains to stress that it is not endorsing CVT's new policies because it cannot rule on matters of ethos nor can it tell the trustees how to run the charity. Only the High Court can decide whether CVT is in breach of the charity's Articles and Memorandum of Association says the Commission.
The Commission merely says that it is up to the trustees to decide how to run the charity and the commission is satisfied the trustees have acted according to their duties.
However, the officer in charge of the case goes on to mention “the reference to the trustees 'taking full account of the Steiner principles' in my previous letter. This simply referred to the trustees having carefully considered (or 'taken account of') Steiner principles as part of their decision-making processes. It was not a comment on whether the decisions reached or consequent actions were in accordance with Steiner principles because, as discussed, this is not something we can determine."
This latest clarification represents a subtle but distinct change in emphasis from its previous response.
A Delrow family member commented: "What the Commission fails to explain is how, since it cannot have an opinion on matters of ethos or doctrine, it is in a position to say whether or not CVT has taken full account of them. All it is entitled to say is whether or not it is satisfied with CVT’s assurance that it has done so, which is entirely different and something we strongly contest."
The Commission also appears to point the Delrow Group of relatives, who commissioned the Picarda opinion, even more clearly to the High Court to resolve the dispute. This centres on the Picarda opinion, which argues strongly, that CVT is failing to uphold the principles that the charity stands for and is therefore in breach of trust.
Lawyers for the group had written to the Commission suggesting that its initial response to the Picarda opinion was not properly considered and was based on earlier complaints from other families.
In its latest letter the Commission insists it had properly considered the Picarda opinon despite not being able to rule on the its main arguments.
CVT have since responded to Picarda with their own brief legal opinion. This agreed that the charity must conform to the charity’s aims but refutes allegations that the charity is in breach of trust.
Another Delrow Group parent commented: "The Commission is effectively washing its hands of the affair and of the points raised by Picarda. The issue of whether or not CVT are doing what they should be doing remains up in the air. We shall have to consider our next step."
The majority of Delrow families, as well as families at Botton and The Grange communities, are opposed to CVT’s new policies. This was made clear at a recent meeting with trustees and senior management.
Delrow Group families have said that the proposed mediated talks scheduled for December 2014 are their preferred way of resolving the current serious dispute. But should these fail all options remain open.
The Picarda opinion
The original opinion was drafted by Mr Hubert Picarda QC, a charity law barrister, described in Chambers and Partners as "a vastly experienced charities specialist, who, quite literally, wrote the book on charities law. He provides regular advice to a considerable range of charities, ranging from local charitable organisations to international household names."
The nub of Mr Picarda's submission to the Charity Commission is that:
1) The overriding duty of the trustees of a charity is to carry out the charitable trust in accordance with its terms.
2) It is not for the trustees, or the Charity Commission, to interpret the wording of the Objects clause so as to exclude an integral part of it.
Mr Picarda argues that if CVT continues effectively to strip the charity of its raison d’être, the contributing public - CVT’s donors on whom it relies heavily - may view this as "little short of a scandal."
There is already considerable anecdotal evidence that donors are having second thoughts about giving to a charity they believe is straying irreversibly from its founding principles laid down by Karl König, its founder.
Mr Picarda argues that the High Court will enforce such a trust for those who adhere to the original principles, even where they may not form a majority.
CVT have been arguing that, despite the sweeping changes made at the Delrow community and elsewhere - and now proposed at Botton and The Grange communities, in the face of mounting opposition - the founding principles of Camphill were being respected.
Families vigorously dispute this. They say that, despite token nods in that direction, the core principles of life-sharing (where carers and residents share their lives as equals in a family setting as part of a community) and of vocational co-working are being dismantled. They are confident that a careful and impartial examination of the radical changes to the culture and ethos of their community by the courts would back their argument.
Mr Picarda, in his opinion, asserts that the principles of Dr. Rudolf Steiner as applied in Camphill "are a known and demonstrably provable factual criterion which is capable of being adjudicated upon." These governing principles of the CVT Camphill communities are clearly embedded in the charity’s founding document.
He further argues that replacing what he calls a "shared life community ideology" with a "care worker culture" represents a fundamentally different charitable purpose. This, families believe, is self-evidently the case.
In Mr Picarda’s view, the objects of a charity, its purpose, is "intended to last," unless very sound legal reasons can demonstrate that it is expedient for these to change. Both he and the Delrow families believe that CVT have failed to make a case for such a radical departure.