National Funding Scheme under review again

The National Funding Scheme (NFS), which operates the DONATE digital fundraising platform, is under the spotlight again following the Charity Commission’s decision to open a fresh case to review its compliance with charity rules.

This is the second time in two years that the Commission’s senior investigators have opened a case relating to the organisation, “to assess whether there are regulatory concerns” about its activities, a spokesperson confirmed to AP.

The new case has been opened following the publication of the organisation’s latest accounts, which reveal falling donations and a continuing deficit.

The Charity Commission first conducted a regulatory review of the charity in 2016, after a range of concerns were raised about its activities, including a conflict of interest involving the charity’s founder, William Makower, and two private companies of which he is a director and major shareholder.

After closing the initial case, the Charity Commission told AP: “Trustees have provided the appropriate evidence to manage our existing concerns at this time.”

Latest accounts

NFS’s latest accounts show that, since its launch over four years ago, the DONATE platform has been used to facilitate donations worth almost £500k. But to achieve this, the charity has accepted grants to the value of over £628k from funders including Arts Council England, Nesta and Paul Hamlyn Foundation, primarily for a software licence and digital development work. Nearly three quarters of this has been paid or is owed to Makower’s two companies, Panlogic Ltd and Digital Information and Giving Ltd.

The 2015/16 accounts noted that the trustees were “very aware of the potentially conflicted position of Mr Makower and have taken advice directly from the Charity Commission” on this.

A history of controversy

The NFS has been beset by controversy from the start. It came to prominence following high-profile support for its launch from former Culture Secretary Jeremy Hunt, who personally commended Makower for his work developing digital giving in the arts.

Interventions by the DCMS, a member of the House of Lords, the V&A and the National Portrait Gallery enabled the fledgling company to use the designation ‘national’ in its name – something restricted to companies that demonstrate they are “pre-eminent or very substantial” in their field.

The NFS describes its charitable objectives as “the promotion of the efficiency and effectiveness of charities,” which it aims to do primarily through supporting new digital ways of giving to charities. But NFS has faced criticism for replicating the work of other more popular donation platforms, which charge lower fees.

An AP investigation revealed that the NFS’s early fundraising ambitions were fanciful. By 2015 the organisation had helped charities raise just £250k – just 1% of its £24m target.