Page last updated at 10:11 GMT, Wednesday, 24 September 2008 11:11 UK

Clothing charities investigated

By Maggie Dolan
BBC Inside Out

G P Bail and M E Bail
OCA director Graham Bail admitted making illegal collections

Two clothing charities registered with the Charity Commission are being investigated for operating illegally.

An investigation by BBC Inside Out East found The Children's Welfare Foundation has failed to provide any evidence of causes it has supported.

Another charity, Orphan and Community Aid, which supports projects in Africa, has been making unauthorised payments.

Norwich City Council is investigating unlicensed collections. The commission is monitoring the charities.

Frozen accounts

Both charities were leafleting for used clothing collections across the country.

It is an industry worth half a billion pounds a year and where tonnes of old clothes are collected from homes across the UK.

Used items are sold on and mainly end up in Eastern Europe.

The charities in question used a commercial company called Fortune International to collect clothes on their behalf.

It said it paid the charities a percentage its profits from exporting the clothes, in return for collecting in their names.

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Two trustees of the Orphan and Community Aid charity tried to avoid being interviewed by BBC East Inside Out presenter David Whiteley

The Children's Welfare Foundation leaflet said the organisation was "dedicated to the relief of sickness among people residing temporarily or permanently worldwide".

However the charity has failed to provide the commission with any evidence of the funds it raised or causes it supported since it began operating in 2006.

The Charity Commission told the BBC it had concerns about the foundation's fundraising methods.

We are now going to investigate the cases that you have raised with us and in due course we will take the appropriate action
Alan Waters, Norwich City Council

The Children's Welfare Foundation, based in Lancashire, told the commission in September 2007 it intended to wind up, but Inside Out found out leafleting was still going on for months afterwards.

The Charity Commission has since frozen the charity's bank account.

Inside Out secretly filmed a collection being made on behalf of the Children's Welfare Foundation in April 2008 in Poringland, Norfolk and also uncovered that unlicensed collections were made.

Getting licences

Norwich City councillor Alan Waters said getting a doorstep collection licence from the council was a rigorous process.

"We do checks to ensure that this is bona fide charity and at least 75% of the money that is collected goes to the beneficiaries that the charity has been set up for.

"The charity and the collector can face heavy fines and imprisonment and depending on the gravity of the offence we will clearly press for the severest penalty we can.

"We are appreciative of knowing that you have presented us with this story we are now going to investigate the cases that you have raised with us and in due course we will take the appropriate action."

We have confirmed with the charity that one of the trustees received remuneration, which is neither permitted in the charity's governing document nor which has been authorised by us
Charity Commission

Inside Out also filmed an illegal collection for Orphan and Community Aid in Norwich on 9 July.

The charity paid 4,000 to good causes in 2006, and paid a salary to its director Graham Bail, of Stocks Hill, Lower Benefield, Peterborough, Cambridgeshire of 29,720.

The accounts for the year ending in 2007 showed donations given to good causes wentup to 8,500 and his salary was 6,527.

However at the same time, the charity established a trading subsidiary, OCA Trading, which told the commission any profit would go to the charity.

Total income for OCA Trading for the period ending in 2007 was 48,053, and its expenses were 48,017 - a profit of 36.

The BBC asked the commission whether authorisation for a salary was granted to the OCA trading subsidiary.

The commission confirmed unauthorised payments had been made but did not disclose which accounting period was in question.

However trustee and director Graham Bail told Inside Out money had been reinvested in order to generate future income "so we can make money for good causes".

He admitted collections had been made illegally and that it was his responsibility.

The commission said: "We have confirmed with the charity that one of the trustees received remuneration, which is neither permitted in the charity's governing document nor which has been authorised by us.

"Concerns have been raised with us about the governance and financial management at the charity Orphan and Community Aid, these include concerns about the level of money that has been spent on charitable activity.

"We're currently looking into these concerns to determine what, if any, action may be required."

Michael Lomotey, head of collection protection at another charity, Clothes Aid said its reputation could be easily damaged by others.

"For Clothes Aid and all the other legitimate charities we jump through hoops to get the licence.

"But there are organisations out there that are flouting it. It makes it really difficult for us."

The BBC Inside Out programme screens on BBC1 in the East at 1930 BST on Wednesday, 24 September.

Or watch it on iPlayer.




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