An issue of fraud

A headline with the words “charities” and “fraud” in is always unnerving. Reports over the weekend on the conviction of a gang of fraudsters who planned to steal millions of pounds from a wide range of charities such as Children in Need, Comic Relief, Banardos and the Lottery were concerning.

There are various types of fraud – the sorts that beset any organisation. However this case highlights a particular issue. The further the donor is away from the beneficiary the more difficult it is to control. Perhaps if donors (and the media) focused less on “administrative expenses” and more on controls this might be less likely.

All the organisations involved were donating money to charities which purported to be supporting work mainly in developing countries but were fraudulent and had been set up for that purpose. The sums of money for each grant were (relatively) small and the work was being done in areas which it would be expensive or even dangerous to visit.

I know that eyes glaze over when we talk about our processes but this highlights how important they are. The financial controls we have regarding the processing of donations and management of our funds are very tight, as you would expect, but the controls we exercise on the spending of the money on research are equally as tight.

The hurdles our researchers have to jump are high and many: the research first has to pass through a review process with external reviewers; then through our Scientific Advisory Board; then through the Trustee Board at which point a lucky (or should I say a very bright) few are awarded a grant. The next set of controls is put into place with a contract. Scientists have to report to us regularly on progress. We bring all our new grantees to a meeting and brief them on what is expected and how hard it is to raise the money. They need to relate the grant that they have received to someone running a marathon or a school having a wear it pink day. Money is not anonymous.