The Charity Commission inspected Our Local Heroes Foundation, based in Bamber Bridge, and discovered a “very low level of charitable expenditure”, “substantial spending outside the charity’s objects” and “an insufficient focus on providing grants to beneficiaries”.
But bosses at the organisation say they help veterans in a raft of other ways, aside from direct grants, but the watchdog found significant spending was not within the “objects” of the charity - to relieve the financial hardship of veterans in need by making grants.
The Charity Commission visited Our Local Heroes Foundation last year, and a report said the charity’s income in 2015 was £500,000, but only £10,000 had been used “to further the charity’s objects by providing grants”.
Our Local Heroes Foundation bosses say there was more money in the bank in reserves, and more was spent on grants and services than stated in the report.
The report said a three-point action plan was issued to the charity, including conducting fund-raising in an “open and transparent way”, to “maximise the proportion of income given as grants and minimise administration costs”, and to “ensure money is not spent outside the objects of the charity”.
It said the action plan was followed, and said: “Costs were substantially reduced by over £100,000 a year.
“The trustees also stopped all projects that did not directly further the charity’s objects.”
There was no answer at the charity on the contact numbers given on its website, but a statement from the organisation online said services to veterans including counselling, back to work training and rent and housing bonds had resulted in a “high level of in house running costs”, and “a very small proportion of funds went directly in grants”.
The commission found no evidence of fraud or theft in the charity, but the statement said: “The concern was that whilst the charity was doing a lot of good work, it was outside the scope of the objects.
“The charity has taken on board the recommendations of the Charities Commission and appointed a new chair, in early 2015, to assist in realigning the organisation.
“The charity now only provides financial aid to veterans, this is not paid direct to the veteran, but goods or services are provided.”
It said examples of grants were cash to fund training courses for a veteran, and money to help a veteran with the start-up costs for a business.