Many of you will have read about how the environmental charity, Friends of the Earth avoided restrictions on political activity by using a non-charitable company called Friends of the Earth Limited to carry out its anti-fracking campaign.
This has brought to light concerns that the use of such similar names has the potential to confuse the public and thus damage public trust in charities. Accordingly, the Commission is considering closing a loophole in charity law that enables charities to set up non-charitable limited companies to carry out campaigning which could be deemed political in areas related to their causes.
Last year Friends of the Earth was accused of scaremongering to raise money when it suggested that the sand used in fracking could cause cancer. The non-charitable company, Friends of the Earth Limited distributed leaflets seeking donations in respect of its campaign against hacking.
The fracking company, Cuadrilla made a complaint against to Commission on the basis that the leaflet had caused ‘unfounded fear.’
A spokesperson for the charity stated that both the charity and the company were separate legal entities and the charity had not been involved in fracking campaigning since June 2015, as the political sensitivity of the issue meant that it was considered to have become high-risk for the charity. Therefore, the campaign was solely carried out by Friends of the Earth Limited.
Cuadrilla’s chief executive, Francis Egan stated that this arrangement was a ‘sham’ which created a fiction that the charity was no longer involved in the anti-fracking campaign and urged the Commission to investigate the matter.
However, the Commission was unable to take action as the campaigning had been carried out by the non-charitable company and accordingly did not fall under its remit.
Notwithstanding this, the Commission did state its intention to review its policy in this area and noted that there are a number of instances where a charity has a similar name to a non-charitable body. In such instances it is not clear to the public whether the organisation they have chosen to support is the charity or non-charitable body with the same name. This is clearly misleading and runs the risk of causing reputational damage to the charity as well as undermining public confidence in the sector.