The charities and good causes owed money by the Dove Trust, owner of the suspended fundraising website CharityGiving, are due to start receiving payments in September, after a High Court ruling on how the charity must pay out the funds owed.
But they are likely to only receive 33p for each pound they are owed.
The High Court ruling, made at a directions hearing in London yesterday, says the Dove Trust has £709,529 in frozen bank accounts, but owes the 1,812 charities and good causes £1.68m.
Mr Justice Henderson ruled that the available funds should be distributed among the charities and good causes in proportion to the amounts they are owed.
There should not be any distinction between those who donated to the site before the appointment of the interim manager and those made afterwards. This is known as the pari passu approach.
Each will receive about 33p in every pound owed, under the ruling.
The Charity Commission suspended the online giving site, CharityGiving, and appointed Pesh Framjee of Crowe Clark Whitehill as interim manager of the Dove Trust in June last year, in order to protect funds raised through the platform.
In his ruling, Henderson said: “I think the fairest solution is to regard all the unpaid recipients as participants in a common misfortune brought about by the way in which the donation scheme was managed by the trustees.”
He said the administration of the website by the Dove Trust “left a great deal to be desired”, but that he was not concerned with apportioning blame in the current proceedings. He pointed out that the trustees strenuously deny allegations of misconduct.
Henderson compared the charity’s operation to that of a pyramid scheme and pointed out the long delays in the trustees filing annual reports – the latest accounts filed with the Commission are for the year ending 5 April 2009.
The Commission said in a statement it was now for Framjee as interim manager to carry out checks and calculations to confirm how much each of the charities and good causes will receive. Initial distributions are expected to begin in September, the regulator said.
Kenneth Dibble, chief legal advisor at the Commission, said: “We recognise that charities, good causes and generous donors may still be disappointed that their donations will not be paid in full and we are looking into all available options for recovery of further funds owned by the charity.
“Ultimately it is the trustees who are responsible for the management and administration of the charity to account for any shortfall of funds.”
The Commission said its investigation into the Dove Trust was still ongoing.
Founder hopes to repay charities in full
Keith Colman, founder of the Dove Trust and a former trustee, said in a statement welcoming the High Court’s ruling, that the £709,000 available for paying-out was an interim payment: “I expect there will be more payments in due course, and I hope that ultimately the payout will be 100 per cent.”
He said there were "no missing donations”, up to £400,000 is owed in gift aid and the charity has other assets too.
Colman has appealed to the Charity Tribunal over issues relating to the Commission’s decision to shut down the website.
“The actions of the Commission and their mishandling of the situation (particularly in freezing the bank accounts and appointing the interim manager to the exclusion of the trustees) led to the Dove Trust’s collapse. The Commission has made various allegation against the trustees in respect of alleged mismanagement, all of which I deny,” he said.
