November 11, 2014; Third Sector
There has been further disturbing news since NPQ reported on the demise of the UK online anti-bullying charity, BeatBullying. The charity’s website closed on October 20th and it was later confirmed that trustees had called in administrators (similar to filing for Chapter 11 in the U.S.).
Soon after the charity’s financial difficulties were publicized, ITV, a major television channel, indicated that it was taking advice about recovering £698,000 ($1,094,000) of donations, according to Civil Society. The donations had been raised for the charity through the station’s Text Santa telethon. It seems in the light of the apparent collapse of the charity, the TV station has taken badly to the statement in the charity’s accounts that the donation would “enable the charity to pay all its creditors and put the charity in a positive cash position.”
The UK Government’s Cabinet Office also says is reviewing whether it will take action to recover grant funding of almost £400,000 ($627,000) given to the charity.
Further bad publicity appeared in Third Sector, a trade publication for the UK nonprofit sector, which published the story of a former member of staff about the way staff dismissals were executed. “The process was handled horrifically, with everyone finding out at once all in one room while other staff were being herded like cattle through the car park away from the office,” the former staff member says.
It turns out that in the months prior to the closedown, staff had been paid considerably less than their usual salaries. As early as August, salaried staff had been told they would be taking a haircut. Over the next two months, the amounts sliced off continued to increase. Workers on independent work contracts had their payments reduced by 50 percent.
The staff member says:
“When October’s payday came, no payments were made, and again there was no communication. Staff have tried getting hold of management to find out what is happening, but nobody answers the phone and we have just been told to ‘wait for the trustees.’”
One final story to emerge does not cast a good light on those trustees. Third Sector reports on a letter that tried to alert trustees to the looming catastrophe. The letter, dated October 20th, was from a group of current and former staff members. It accused the charity of breaching employment contracts, failing in their duty of care to employees, not operating proper financial controls, and failing to keep pension contributions up to date, among other concerns.
The letter also accused the charity of failing in its duty of care towards its employees, many of whom were young people.
It said: “The mission of the charity is to relieve suffering from bullying and support young people with their mental health. However, this was at odds with the way the charity behaved towards its employees – many of whom are young adults with mental health problems who had recently been made redundant.”
The writers asked trustees to explain why the charity decided to hire at least 10 new staff members in the first half of 2014 despite posting a deficit of £280,065 in 2012 and making redundancies in 2013.
They also asked the trustees to explain the decision to invest in We Are Cosmo, the social enterprise company set up by BeatBullying, which is also apparently facing serious financial difficulties. The extent of its financial predicament has yet to be clarified but is known to be 12 months overdue in filing its official accounts.
Our earlier newswire highlighted a couple of curious aspects to this unfortunate story. One was that it appeared to provide yet another example of the UK government exercising poor judgment before providing substantial funding to a non-profit. The other was the remarkable turnover of trustees of the charity. Their willingness to sign off accounts stating that the organization was a going concern so soon before its spectacular collapse points to extraordinary lack of judgment. It will be interesting to see if ITV pursues its claim and whether the trustees are ultimately judged liable.
But for the moment, it is the human side of this that is the most piquant. The lives of the staff of the charity and those bullied young people who gained support from the charity’s service are already facing unpleasant impacts. As one staff member says:
“All my plans are ruined and I don’t know what I am going to do about living costs. It’s Christmas soon and I literally have no money. They just don’t care about their staff….These are people’s lives; we have families, rent to pay, food to buy and so on.”