The three-year investigation found serious failings in the trustees’ governance of the charity, including in the financial management of a £5.7m legacy from its founder and the management of conflicts of interest and related-party transactions.
The Schwarzschild Foundation was established for the education and the relief of poverty for women and girls in the orthodox Jewish faith and was registered as a charitable trust in 2014.
Following the death of the founder, Helga Schwarzschild, the charity became entitled to her estate, which included proceeds from the sale of her property and a property portfolio, the value of which was approximately £5.7 million.
The inquiry was opened into the charitable trust in 2023 after the National Crime Agency identified £250,000 of the charity’s funds in a personal bank account under a trustee’s control. The charity’s lack of monitoring and verification of the end use of funds meant it would not have detected or recovered the funds independently.
The trustees only verified the use of three other £250,000 grants after the Commission became involved. The inquiry found two grants of £250,000 each were awarded to organisations in which at least one trustee had unmanaged conflicts of interest.
The inquiry also found unmanaged conflicts of interest between the charity and the companies for which it was sole shareholder, and in trustees’ businesses providing professional services to the charity.
During the inquiry the Commission put in place a temporary, protective order preventing the charity’s trustees from entering into any transactions or making any payments for the charity without the regulator’s prior written approval.
It also appointed Interim Managers to review the governance of the charity. The Interim Managers confirmed there had been no meaningful review of a £4 million portfolio of investment properties held on the charity’s behalf, such as property value or rental income, or whether the investments represented the best use of the charity’s funds.
The inquiry found that due to the lack of proper policies, procedures and monitoring in place, the charity was exposed to a serious risk of misuse, misapplication or loss of funds. This was misconduct and / or mismanagement in the administration of the charity.
The inquiry also found that trustees had failed to record their decision-making appropriately so could not evidence that decisions made in respect of grants and investments were in the best interest of the charity.
Before closing the inquiry, the Commission issued an Official Warning to the charity for a breach of trust or duty and set out a comprehensive action plan the trustees must implement.
Charity Commission Head of High Risk Compliance, Brian Wilson, said:
Good policies and procedures are fundamental components of effective charity governance. These, along with robust decision making, are the checks and balances that ensure a charity is well run and can demonstrate funds are being spent in its best interests.
The serious gaps in governance at The Schwarzschild Foundation left it vulnerable and amounted to misconduct and / or mismanagement of the charity. Following the National Crime Agency’s initial detection of a £250,000 payment to a trustee’s bank account, the sum was returned to the Foundation and our inquiry forced checks on three more £250,000 grants.
Robust checks should have been in place, not least as almost 80% of charities have an income of £250,000 or less so these funds could represent a significant boost to a charity’s income.
While we have closed the inquiry, we will continue to monitor the charity’s implementation of the action plan.
The Commission produces a series of 5-minute guides for charity trustees, including managing finances, conflicts of interest and making decisions.
ENDS
Notes for Editors
- The Charity Commission is the independent, non-ministerial government department that registers and regulates charities in England and Wales. Its ambition is to be an expert regulator that is fair, balanced, and independent so that charity can thrive. The Commission has a wide range of regulatory powers which it can use to support charities and protect charitable assets. Further information about the Charity Commission and its work is available at The Charity Commission - GOV.UK.
- On 23 June 2023, the Charity Commission opened a statutory inquiry into the charity under section 46 of the Charities Act 2011 (‘the Act’) as a result of its regulatory concerns that there is or has been misconduct and / or mismanagement in the administration of the charity. The inquiry closed on publication of the inquiry report.
- A statutory inquiry is a legal power enabling the Commission to formally investigate matters of regulatory concern within a charity and to use protective powers to protect the charity and its beneficiaries, assets, or reputation.
- The Commission does not investigate criminal allegations which are matters for the police.
- An official warning ensures the charity or trustee(s) concerned knows that a breach, misconduct or mismanagement has taken place and that it needs to be rectified, and ensures they know what action they should take to stop the misconduct or mismanagement or to prevent a recurrence of it. There is more information about the Commission’s use of official warnings on GOV.UK.
- On 20 March 2024, the inquiry used its protective power under section 76(3)(g) of the Act, to appoint Edwina Turner and Catherine Gibbons, of Anthony Collins Solicitors LLP, as joint Interim Managers of the charity. Having completed the scope of their appointment, they were discharged on 20 June 2025 by an Order made under section 337(6) of the Act.