The UK's charity fundraising regulator has asked the Salvation Army to explain revelations that it allowed a businessman to earn a multimillion-pound personal fortune from selling secondhand clothes donated to the cause.
The Fundraising Standards Board has asked the Christian charity to investigate complaints that it may have misled its donors about the use of profits from the sale of the 2,500 of tonnes of clothing donated each month
A director of the charity's trading arm personally earned more than £5m from sale of the clothes over the last five years, affording him a lifestyle that included buying a racehorse and a £1m mansion.
The wording on the side of the charity's secondhand clothes banks dotted across supermarket car parks nationwide said profits from their sale are used "to help the Salvation Army's work with people in need both at home and abroad".
The Salvation Army is a member of the standards board, the charity sector's self-regulatory body which sets out to safeguard public trust and confidence in fundraising tactics used by good causes. The charity could be brought before the independent board to answer questions and, if left not satisfied by the answers, could be removed from the register.
The Salvation Army earned £16.3m over the past three years from its network of 4,500 clothes banks across Britain. It has launched a programme to change the wording on the banks to indicate a portion of the profits from the sale of the clothes will go to Kettering Textiles, a private firm contracted to manage the scheme and sell the clothes, mostly to customers in eastern Europe. It estimates the new wording will be applied within six months.
The board is likely to look at what is known as the Salvation Army's "fundraising ask" in the past three years when Kettering Textiles directors earned more than £10m from the scheme's profits. Kettering Textiles' sole owner, Northamptonshire textile trader Nigel Hanger, earned more than £1.6m from the fundraising operation in 2010.
He also sits on the main board of the Salvation Army Trading Company, Kettering Textiles' client in administering the scheme.
The standards board's chief executive, Alistair McLean, said the first stage is for the complaint to be passed to the Salvation Army for internal investigation.
"The sector sets incredibly high standards in self-regulation and takes this issue extremely seriously as public trust and confidence is the cornerstone of ongoing giving," said McLean.
"The [Fundraising Standards Board] responds to specific concerns from the public about fundraising activities and plays a crucial mediatory role in both protecting public interests and in ensuring charity members are committed to fundraising best practice by being honest, open, clear and accountable in their fundraising activities".
The Salvation Army said: "We have heard nothing from them yet, but we will be in touch with the Fundraising Standards Board". The Guardian
