Some former staff members at the Cares Family have raised concerns with the Charity Commission about the closure of the charity, Civil Society understands.
Last year, the Cares Family group of six charities announced it would cease operating immediately due to insolvency.
The decision was made due to a “desperately difficult fundraising environment”, and announced just months after the charity’s founder and former CEO Alex Smith stepped aside, saying the organisation was “more secure than ever”.
A group of 25 former employees wrote to the Commission in December, arguing that an inquiry was needed to establish the reasons for the charity’s insolvency including its financial management.
The Commission replied in January, thanking the group for raising concerns, saying the information provided would not change its level of engagement at that time.
The regulator told Civil Society it received a serious incident report in October 2023 from the Cares Family regarding its closure, but is assured trustees are “handling matters as we would expect”.
A former employee told Civil Society: “As ex-employees, we’ve still not received any further information about the causes of the insolvency or what went wrong (beyond the very broad reasons given at the time), or why the organisation had to close so suddenly at the end of October.”
Social media channels revived
This week, the Cares Family’s social media channels and website were revived by Smith and others to preserve the charity’s legacy.
Smith said: “It’s important that the learning from 12 years of the Cares Family’s deep impact is saved and shared widely, and not dissolved along with the charity entities.
“The intention is to steward that learning faithfully to the Cares Family’s values. We have invited staff to be part of that stewardship and hope they will work with us to preserve and build on the legacy of something we all love.”
Some comments on social media raised questions around a perceived lack of detail on the decision-making behind the closure, and one called the post “insensitive”.
Nicola Upton, who replaced Smith as chief executive shortly before the charity’s closure, wrote in response to one post: “I’m the former CEO who discovered major financial issues after a week in role last August and had the horrible task of overseeing the closure.
“Although sadly we had no choice but to end most staff members’ contracts with immediate effect on 31 October last year, a small team remained and worked tirelessly for the few days we were allowed, to call and contact beneficiaries to help them make a future plan, signpost elsewhere, and try to offer some comfort about the shocking news.
“It wasn’t how anyone wanted to do things but we did our very best and I think it helped at least to some degree.
“After that, next steps were in the hands of the liquidators and the trustees, so employees (including me and the senior team) were not able to do more as we had no access to data or systems.
“It broke my heart then and it breaks my heart now.”
Serious incident report
Documentation previously seen by Civil Society suggested that unanticipated liabilities to HMRC and high turnover of directors and key staff contributed to its insolvency.
Accountancy firm RSM was engaged on 16 October to undertake a review of the financial position of the charity and the associated charities.
On 24 October, RSM presented its findings to the board of trustees, who then decided to close the charity.
Most staff members were made redundant on 31 October, with some staying on until 3 November to assist trustees with the closure.
Overall, the charities, which aimed to “build community and connection” in their areas, had a combined income of £2.46m.
A Commission spokesperson said: “In line with our guidance, the trustees of the Cares Family filed a serious incident report in October 2023, relating to its closure.
“We have engaged with the charity’s trustees and are assured that they are handling matters as we would expect.”
RSM declined to comment.
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