In one corner we have the Charity Commission, regulator of charities in England and Wales armed with increased funding and a relatively new senior management team.
In the other corner, we have the Joseph Rowntree Charitable Trust (JRCT), one of the most well known grant making charities in the country.
The two heavyweights have previously met in the Charity Tribunal with JRCT (along with an organisation it had funded) inflicting something of a bloody nose on the Commission who had been accused of exceeding its regulatory powers in respect of the exercise of trustee discretions.
It looks like round two might be about to kick off...
The Commission has asked JRCF to explain its decisions in respect of its funding of two organisations. The first is Teach na Failte which was founded by the Irish National Liberation Army’s political wing, the Irish Republican Socialist Party. The second is JUST Yorkshire, a charity that has publicly accused a Labour MP of industrial scale racism.
Charities awarding grants are obliged to ensure that funds are applied for exclusively charitable purposes. This does not mean that grants can only be made to registered charities - it is the end use of the funds that is important issue.
The Commission has quite significantly strengthened its guidance on grant making organisations over the past few years. Additional questions have been added to the Commission's application form and new guidance has been issued in respect of the making of grants to non-charitable organisations.
It will be interesting to see how this story develops and what findings the Commission publishes. Any such findings will be of real interest to other grant making organisations, particularly those whose funding policies and priorities extend beyond the more obvious charitable purposes.
Michelle Russell, director of investigations and enforcement, at the Charity Commission said: “Our guidance makes clear that charities need to take steps to carry out appropriate due diligence on organisations applying for grants, must ensure grants are only for activities and outcomes that further the charity’s purposes and decisions made are in charity’s best interests. Charities should be able to explain and justify their funding decisions. We have asked the charity to do this. “If we need to take action in either case we will not hesitate to do so.”