Royal disorder in the charity sector 

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The writer is a mediator and barrister at 1 Crown Office Row

A boardroom dispute, playing out in the press, is bad for most organisations. When the organisation is a charity — and thus dependent on the public’s goodwill for funds — it can be a disaster. When one of those involved is a celebrity or royal, it is no longer a disaster but a public-relations nightmare.

Currently that is the self-inflicted plight of Sentebale, the charity co-founded by Prince Harry with Prince Seeiso of Lesotho. Sentebale — meaning “forget me not” in Sesotho — was set up to honour the work of their mothers in southern Africa. Thanks to a damaging and escalating dispute, however, it is likely to be remembered for all the wrong reasons. 

Last week the charity issued defamation proceedings accusing Prince Harry and a former trustee of orchestrating a “co-ordinated adverse media campaign” against it. In doing so, Sentebale appears willing to risk its own demise, unable to move on from a dispute that erupted in 2023 over a fundraising strategy and quickly became ugly and public. 

The Charity Commission, which registers and regulates charities in England and Wales, criticised all parties last August for allowing the dispute to play out publicly. After an investigation, it found weakness in governance, but no evidence to support allegations made of “widespread or systemic” bullying or harassment. But public support for the charity was damaged, potentially harming donations.

Disputes arise in all organisations. Well-meaning people disagree and sometimes fall out — spectacularly. But a spate of high-profile cases suggests the charity sector may be especially prone to such disputes — perhaps due to the strongly held convictions of its leaders and their sense of moral purpose.

Given that such disputes undermine trust, charities should balance transparency with the need to contain and resolve them without the damaging glare of publicity. The Charity Commission has observed: “If disputes do occur, the regulator recommends seeking mediation.” This opens a channel of communication via a neutral, professional third party. The process — conducted well — makes it possible to get to the heart of a dispute quickly and confidentially. 

On occasion the Charity Commission gets tough. In 2020, in a long-running dispute between Christ Church College, Oxford and its dean (which cost the college £6.6mn), the Commission instructed the parties to enter into formal mediation — after which the dean resigned from his post. 

Oxfam has struggled with high-level disharmony paraded in public. In February, the former CEO of Oxfam GB, Halima Begum, told Channel 4 News the board had subjected her to sexism and racism and she had been forced out after a “witch-hunt”. Oxfam has commissioned a lawyer-led review to untangle the web of allegations and counter-allegations and the Charity Commission has an open investigation into its governance and leadership.

To handle demand, the Charity Commission has had to recently expand its workforce. Increasingly, however, it underlines that its job as a regulator is not “to referee disputes”, but to ensure charities are governed effectively, funds accounted for, and trust is maintained. 

Sentebale stated last week that its defamation proceedings were being paid for by “external” rather than “charitable” funds. But money aside, legal action will inevitably consume the board’s energy and time. How, precisely, do such actions advance any charity’s purposes? 

It remains to be seen how this sad spectacle plays out. But whatever the outcome of this individual case, if charities can’t keep their feuding away from the courts, the case for compulsory mediation is likely to strengthen. This may mean more charitable money goes to where the donors intended, rather than into the pockets of lawyers. Most people would applaud such a result.