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The Charity Commission has rightly been taken to task for failing to oversee charities that serve little or no benevolent purpose.

Recent cases such as the Cup Trust, a so-called charity that was in fact a massive tax avoidance scheme, have called into question not only its vigilance but its competence. This was an operation, run out of the British Virgin Islands, that scarcely disguised its hard-nosed intentions. Having raised £176m from “donors”, it gave just £55,000 to the good causes it claimed to support.

Yet despite investigating this obvious charade for two years, the commissioners failed even to deregister it because it met the narrow legal definition of a charity.

But it is not only in failing to apprehend miscreants that our charity overlords damage their own sector. A good example is another scandalous situation to which they have brought their trademark legalistic lethargy. Only this time it involves a real charity and one that has raised more than £10m to buy artworks for a public museum. The commission seems willing to acquiesce in a hostile takeover that will extinguish the charity’s independence and see those acquisitions restored gratis to another charity that sold them.

The Foundling Museum was set up just over a decade ago to secure the future of a remarkable body of art that had been assembled by the trustees of a celebrated London hospital founded in the 18th century by a wealthy City merchant, Thomas Coram, to raise and educate homeless children. The hoard includes paintings given to the hospital by William Hogarth, Thomas Gainsborough and Sir Joshua Reynolds, as well as the original score of Handel’s “Messiah”.

In the days before public museums, Hogarth saw the donations – which he orchestrated – as a way to popularise artists’ work. Exhibitions of paintings at the hospital organised by the Dilettante Society led to the creation of the Royal Academy in 1768.

Fast-forward to the late 1990s and the charity, now named Coram, had long closed the hospital and was running out of money. Rather than oblige it to flog off the dusty but intact collection to fund its childcare activities, an imaginative solution was brokered by the attorney-general. A new body, the Foundling Museum, would be created to sit alongside Coram but be independent of it. This would then raise money to purchase Coram’s artworks, solving its funding problem while keeping the collection together. A group of trustees was assembled which raised £8m and the museum opened in 2004. Since then it has bought much of the Coram collection, including paying £4m for Hogarth’s “The March of the Guards to Finchley” – mostly with lottery money.

Quite why this sensible concordat is now being torn up is a mystery. But Coram has made a bid to reabsorb the collection. Taking advantage of the anomalous fact that it remains in company law the sole member of the museum to which it has sold £10m of art, it recently ejected all the independent trustees, including the prizewinning artist Jeremy Deller. Coram’s ostensible reason seems to be that the museum has not been doing enough to showcase its activities.

Although this overturns the 2001 deal, which specified the museum should be run at arm’s length, the Charity Commission seems content to see control pass. Petitions to Dominic Grieve, the attorney-general, to save the agreement his predecessor brokered have met with little more than embarrassed shrugs.

This is more than a battle of letterheads. If Coram succeeds, donors who have given the museum sums to buy artworks will find those paintings returned to their original owner. Whether or not Coram gets to double-dip, it is a jolly rum do.

Such disregard for donors scarcely assists the collection’s preservation. Both Coram and the museum are now facing a giver’s strike. The Getty and Wolfson foundations have pulled back from planned donations.

One is tempted to say that none of this matters hugely in the broader scheme. While some donors might be discouraged, philanthropy will doubtless clank on whatever becomes of a small art collection. But the museum is such a delight, and the whole thing such a pointless waste of goodwill, that it jars. This week William Shawcross, the Charity Commission’s chairman, bestirred himself to take charity bosses to task for overpaying themselves. How splendid if he were to devote similar energy to stopping this needless act of charitable self-harm.



Letters in response to this column:

Charity stands by plan to secure art to benefit children / From Sir Michael Bear

We protect assets in public interest / From Mr William Shawcross

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