The Charity Commission has concluded its inquiry into Effective Ventures Foundation UK

[Rob Gledhill]

The Charity Commission for England and Wales has concluded its statutory inquiry into Effective Ventures Foundation UK (EVF UK), which was originally launched in 2023 following the collapse of FTX. The full report on the inquiry can be found here, and the Commission’s press release on the inquiry can be found here. The inquiry’s scope was to examine:

• The extent of any risk to EVF’s assets.

• The extent to which the trustees were complying with their legal obligations to protect the charity’s property

• The governance and administration of the charity by the trustees.^[1]

We are pleased that “the inquiry found that the trustees took appropriate steps to protect the charity’s funds and complied with their legal duties acting diligently and quickly following the collapse of FTX.” The Commission’s report notes the full cooperation of EVF’s trustees and that they “sought to act in the charity’s best interests.”

Although the Commission noted that there had been a “lack of clarity” around historical conflicts of interest and a lack of formal process for identifying conflicts of interest, “in practice no issues arose” and “there is no evidence to suggest that there were any unmanaged conflicts of interest regarding funds the charity received from the FTX Foundation or that any trustee had acted in a way contrary to the interests of the charity.” They also note that subsequent to FTX’s collapse, “Both the finance and legal teams at the charity have been strengthened and policies have been bolstered or created with more robust frameworks.”

I’m pleased that the charity commission recognises the improvements that have been made at EV. This report doesn’t change EV’s strategy to decentralise, as previously announced here.

1. ^

   For further context, the Charity Commission is a regulator in the UK whose responsibilities include: preventing mismanagement and misconduct by charities; promoting compliance with charity law; protecting the property, beneficiaries, and work of charities; and safeguarding the public’s trust and confidence in charities. A statutory inquiry is a tool for the Commission to establish facts and collect evidence related to these responsibilities.

[Ramiro]

I have a slightly less rosy picture of this report. Let me illustrate it with some excerpts:

1. The second SIR [Serious Incident Report]

Following the opening of the inquiry, the trustees filed a second SIR on 12 February 2023 as they became aware of a historic safeguarding incident involving one of the former trustees prior to that individual’s appointment as a trustee of the charity.

From the Findings:

The trustees then reviewed and updated their safeguarding policies and procedures and whilst these revised policies and procedures were generally in accordance with the Commission’s guidance, there was scope for further revision to provide more robust safeguarding. The Commission provided the trustees with regulatory guidance and advice in accordance with s.15(2) of the Act about this. The individual named in the SIR resigned from their position at the charity.

Is this about OCB?

2. On conflicts of interest

[…] The inquiry noted that whilst the charity had provisions within its governing document which explained how to manage conflicts of interest there was no formal training or guidance provided to trustees or employees as to what would constitute a conflict of interest, how to raise it or how it should be managed and resolved.

The inquiry found that the trustees were not required to disclose potential conflicts of interest when joining the trustee board, and such a requirement was only introduced in October 2022.

[…]

The inquiry found that the charity had financial policies and procedures but that these were not adhered to or reviewed regularly as the charity’s income grew. It was only in 2022 did the charity have a dedicated finance team to monitor and control the charity’s finances. This lack of control highlights a weak point which the inquiry notes has now been remedied by the charity.

I am glad that the Inquiry found no evidence of malfeasance. But I also think that, for a movement partly based on a critique of the lack of effectiveness of the philanthropy sector, finding out that one of its core organizations lacked some basic controls is a bit frustrating.

[Jason]

I suspect today’s reaction is influenced by the fact that ~all of this was seemingly already ~known and thus not really a negative update?

[JoshuaBlake]

Is this about OCB?

The timings are description line up very closely to the public record, so I’m almost certain it must be.

[Rob Gledhill]

I agree that the full report gives a more rounded picture than my quick summary—but we’re pleased with the final conclusions, and the improvements EV has made

[JoshuaBlake]

My top line summary is: in several areas, EV were operating below the standard the commission would expect, but have rectified the issues to the commission’s satisfaction.

[Ben_West🔸]

Congratulations everyone who worked on this! This kind of behind-the-scenes operational work is extremely thankless, and one small silver lining to this investigation is some public recognition of the work that’s been done.

I personally was expecting the charity commission to just give a bland statement like “we didn’t find anything actionable, closing the investigation.” Them actively complimenting EV reads (to my amateur eyes) like EV staff went above and beyond.

[Larks]

Must be a big relief to get this over with, good work guys! Sounds like the commission generally approved of the post-FTX response. Hopefully a big load off your plate.

[Michelle_Hutchinson]

That’s great news! Thanks for all the work going through the investigation, and strengthening the teams has likely been.