The board of celebrity-backed Social Bite has been found to have acted inappropriately in the preparation of an agreement between itself and another charity.
The Office of the Scottish Charity Regulator (Oscr) has found there was a failure to adequately manage a conflict of interest when it arose in relation to amendments to a draft agreement.
All but one of the charity trustees were said to have been guilty of “misconduct” during a one-off incident in 2019.
The homeless charity, which has a coffee shop on Union Street in Aberdeen, self-reported itself after an issue in an agreement with another homelessness charity The World’s Big Sleep Out Trust.
Josh Littlejohn was involved in the formation of both groups.
Social Bite has been backed by Hollywood stars George Clooney and Leonardo DiCaprio while the Princess of Wales helped out in the Aberdeen kitchen during a visit in 2020.
Conflict of interests
In a report into the matter, Oscr said it was a one-off incident and no one benefitted from the error in judgement, but it hoped that other charities might learn from the situation.
The report stated: “Oscr has found there was a lack of clarity in the communications from one of the charity trustees to the other members of the Social Bite Fund Board about amendments they had made to the draft agreement.
“We also found that the charity trustees at the time did not appropriately manage a conflict of interest that arose when these amendments were made.
“Given the importance of this agreement to Social Bite Fund and its potential impact and financial consequences, we have reached a finding of misconduct in the administration of the charity. ”
This finding of misconduct in the administration of the charity does not apply to one of the former charity trustees, Morag McNeil, as she was on holiday at the time.
The report stressed the charity had cooperated fully with the investigation.
It added: “These findings relate solely to a specific set of circumstances and an isolated incident in July 2019. Oscr has found no evidence of bad faith or personal gain during our inquiry.”
Since the incident, Oscr said the structure and governance of the charity has changed and improved.
The report added: “Oscr does not consider it necessary or proportionate to take formal action in response to these findings because this was an isolated incident and there is no evidence of intentional wrongdoing.
“The former charity trustees took appropriate steps to deal with the issues around the agreement when they became aware of them.”
‘Put interests of charity first’
Oscr said the inquiry had identified useful lessons for the wider charitable sector.
The report stated: “Charity trustees need to ensure they properly manage conflicts of interest.
“This means that they should consider their need to have a formal conflict of interest policy and ensure they have clear procedures that are understood and followed by all concerned.
“Individuals should not be involved in decisions where they are conflicted and are unable to put the interests of the charity first.”
Sir Andrew Cubie, Social Bite chairman said: “Over the past three years Social Bite trustees past and present have given considerable time to support fully Oscr’s inquiry, and we are pleased with the conclusion that no recommendations are being made to the charity and no action is required.
“With only one finding by Oscr which relates to an isolated administrative error from four years ago, it found no wrongdoing, financial detriment to the charity or personal gain.
“Critically OSCR recognised former trustees took appropriate steps when they became aware.
“Finally, we are pleased with Oscr’s positive recognition of the proactive approach taken by both former and current trustees to the governance, reporting and communication of the charity, reaffirming that Social Bite adheres to the highest standards of governance.
“I would like to thank all our sponsors, donors, partners, current and former trustees, and team for their continued support helping Social Bite to achieve our aim of ending homelessness.
“The support we provide to the most vulnerable in society is needed now more than ever and we continue to be fully committed to delivering innovative solutions which will positively impact the lives of thousands of people over the coming years.”
A Social Bite spokesman told The Times: “We respect Oscr’s policy to not name any individuals.
“The finding relates to a collective responsibility around how a process of drafting an agreement was managed.
“This finding was based on collective responsibility and no one trustee has been singled out in relation to it.
“Oscr confirms this was an isolated occurrence with no intentional wrongdoing, bad faith, personal gain or financial detriment to either charity.
“Social Bite’s audited account for the period confirm that Social Bite received the entire amount due from the agreement between the parties and a profitable return from its investment in WBSOT.”
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