Kids Company, the British charity that helped poor and abused children in London, Liverpool and Bristol didn’t collapse yesterday because it couldn’t raise money.
CEO and founder Camila Batmanghelidjh was actually an excellent fundraiser, and had secured £6 million ($US9.4 million) in funding commitments prior to the company shutting its doors yesterday.
But that funding was yanked after a report of a child abuse investigation by Scotland Yard and concerns from the UK government about the way it was run.
This led to £3 million ($US4.7 million) in funding being withdrawn from a private donor and a further £3 million donation from being currently clawed back, Batmanghelidjh told the BBC.
Kids Company has received £37 million ($US57 million) in government grants since 2005. It also employed 650 people.
Why the funding was withdrawn
Prior to Kids Company’s closure, BuzzFeed News and BBC Newsnight both reported that at least two sources said that the British government was trying to claw back a £3 million grant, after initially disbursing £4.265 million ($US6.7 million) in April this year, because the charity was not using the money the way it was intended to be used.
Apparently, the government gave the group the cash for restructuring and on the condition that chief executive Batmanghelidjh stepped down. After Kids Company confirmed in mid-July that Batmanghelidjh would step down in October this year, the funds were sent to its account on July 28.
However, Buzzfeed and the BBC published emails on July 28 that allegedly came from Batmanghelidjh detailing how staff had not been paid, and she was awaiting the government grant and donations to pay them.
Once funding was sent, Buzzfeed published excerpts from an email from Batmanghelidjh on July 30, to staff saying: “I just want to let you know that we have just received our funding from the government and are processing payroll right now.”
This suggested that the grant was not being used for purely “restructuring” but instead for paying staff wages. The BBC reported that £800,000 ($US1.2 million) of the £3 million government grant was being used for salaries.
At the same time, Batmanghelidjh told the BBC that a private donor withdrew £3 million ($US4.7 million) in funding because of “rumour-mongering civil servants”, ministers, and the media reporting that Scotland Yard is investigating the group for child abuse.
According to the BBC, she said “within 20 minutes of the government money being transferred” on July 30, “the police call out of the blue to say that there’s been allegations of sexual abuse related to Kids Company.”
“Within the hour this is all over the news that Kids Company is being investigated … the minute the philanthropist discovers that this is on the cards – they freak and then they don’t put their money in, so then the deal breaks down.”
Batmanghelidjh has come under fire from the media regarding the implosion of the charity and the way the funds were used. But she has spent that last 24 hours hitting out at the government and the media about the way the closure of the charity was portrayed.
On BBC Radio 4 this morning, she said she was “gobsmacked” by the fallout and said the charity has become “a political football for the media and the civil servants.“
She even said that the British government was not doing a good enough job in protecting children as the charity was “dealing with too many serious child protection cases that should have been dealt with by government.“
Batmanghelidjh also criticised the media for misreporting — the government never said the money couldn’t use some of the cash for wages, she said.
“There’s an email from our interim restructuring finance director to the Cabinet Office saying ‘Where is this money, otherwise we can’t pay the staff salaries? And there’s no email coming back from the Cabinet Office saying this money is not for staff salaries,” she said to the BBC.
The Cabinet Office said in a statement to the BBC: “The government has supported Kids Company … to help it deliver services for vulnerable young people and so we are disappointed it has been unable to move to a sustainable financial position.
“The welfare of these young people continues to be our primary concern and we are now working closely with local authorities to make sure they have access to the services they require.”
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