Monday, 2 November 2015

Kids Company: The Money Pit

The enquiry into collapsed charity Kid's Company rolls on, and horror stories continue to pile up.

As a report recently undertaken by PriceWaterhouseCooper makes clear, concerns were raised over the charity and its spending habits for over a decade prior to its failure in July. Yet money continued to trundle into the coffers–only to just as quickly be wheeled back out again. From the initial £50,000 grant recieved through the New Opportunities Fund in 2000, through to the final £3million in rescue funding given just a fortnight before the charity closed its doors for good, a picture is emerging of a media-savvy charity with the ear of government and a shameless habit of demanding more and more public money–in total an eye-watering £46million.

The pattern runs like this: Kid's Company burns through money at a disturbingly high rate, then asks for more, a request accompanied with dire warnings of what might happen to the vulnerable kids under its care should that cash not be forthcoming. With ex-BBC head Alan Yentob in the chair, and David Cameron's blessing, it was a simple matter for Carmen Batmanghelidjh to double down and ask for more and more money.

Batmanghelidjh and Yentob winkled £300,000 from public funds in 2002, £500,000 in 2003, and points north, up to a dizzying £8 million in 2012. All of these demands were couched as "emergency funding" to allow the charity to keep running and avoid redundancies. Most began as requests sent directly to David Cameron. With Ms. Batmanghelidjh frequently sharing the stage with the Prime Minister as a key example of how charity and government could work together, it's not hard to see how her brand of "loving blackmail" could get results.

Over the 15 years of Kid's Company's existance, Batmanghelidjh recieved funding of £46million from the public purse, a much steeper sum than the initial $30million estimate. By 2008, Kids Company had its mitts on 20% of the cash held in the Department for Education’s Youth Sector Development Fund, which was budgeted to support 43 similar organisations.

BuzzFeed News, in conjunction with Newsnight, has exposed some of the more shocking examples of Kids Company over-spending. £67,000 was spent in 2014 on one client, who volunteered at head office and most staff members believed to be an employee. Another had an PhD funded through the charity, despite being the relative of an Iranian government official. Tens of thousands of pounds was provided for this purpose. Most eyebrow-raisingly, two children of a Kids Company staff member were given over £134,000 in funds over six years. Registered as "therapy costs", the breakdown nevertheless included bills for designer shoes worth over £300. I guess you could call that retail therapy.

With opaque accounting methods, accusations of favouritism from Batmanghelidh regarding pay rises and even questionable tax breaks, Kids Company seem to have taken murky practices to a whole new level. Although you almost have to admire Batmanghelidjh for her tenacity and fund-raising ability, the fact remains that she grabbed those funds at the expense of dozens of smaller and equally deserving charities, while sneering at the competition. But Kids Company never issued clear accounts and could not come up with a cohesive plan of where all the "emergency funding" was going.

Our View: the whole debacle is a shocking example of privilege run riot, uncontrolled ego and a charity that saw public funds as a bottomless pit of cash. We have no doubt that there's more to come on this story.

For now, check out Buzzfeed News' full report on the debacle.

http://www.buzzfeed.com/alanwhite/ministers-signed-off-kids-company-grant-despite-horrifying-r#.xlm93exVw



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