The Charity Commission has criticised a charity saying it spent a tiny proportion of its fundraising on its mission to support hospice services.

Hospice Aid UK, which used a fundraising agency to raise money, raised more than £3.2m between March 2013 and July 2020.

But after direct costs and fees were deduced just £200,000 (6% of this total) was left to spend on the relief, care and treatment of serious ill and dying people and to support their families, found the regulator.

According to the Charity Register, its latest financial records for the year ending March 2022 showed that while its total income was £368,529 it spent £409,365.

The charity, which claims that “every pound helps” on its website, has been handed an official warning as part of the investigation, which found misconduct and mismanagement by the trustees.

This is the second inquiry into the charity’s finances with the first concluding in 2016 and resulting in an action plan for trustees to increase the proportion of the income spent on charitable activities.

But trustees failed to comply with this action plan, the regulator found.

The second inquiry, which has concluded this month, also found that trustees “did not undertake due diligence and review” the past performance of the fundraising agency it hired.

“An ongoing lack of transparency in the charity’s accounts” around this agreement was also criticised, as was “poor financial management, including trustees’ failure to submit accurate sets of accounts or a staff appraisal policy”.

The public expects trustees to ensure that the money they donate goes towards delivering the charity’s objects and is carefully managed in the best interests of the charity,” said Amy Spiller, the Charity Commission’s head of investigations.

“In this case, a woefully small proportion of funds generously donated by the public in support of hospices reached the intended cause. This was a direct result of the trustees’ misconduct and mismanagement.

“Cases like this risk seriously undermining public trust and confidence as well as people’s willingness to donate to the thousands of well-run charities doing great work across the country.”

She added: “This is not the first time the trustees of Hospice Aid UK have let their charity down. We will monitor their activities closely and will not hesitate to take firm action should there be any further failing.”

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