What really happened in JST’s £1 million appeal?

Is the Jubilee Sailing Trust pushing the boundaries of good governance? asks Peter Cardy (career charity analyst, and volunteer watch leader with JST for over ten years) as he explores the ‘emergency’ fundraising call that left the sail training world perplexed.

For forty years the Jubilee Sailing Trust (JST) has been taking people of all abilities to sea in its two purpose-designed sail training ships. It has succeeded in enabling thousands of people to sail in spite of disabilities that would create impossible barriers in conventional ships. Its achievements cannot be exaggerated: it has changed the lives of so many people.

But on 28 June 2019, JST unexpectedly launched an emergency £1m appeal. The money was said to be required within a week, otherwise the charity would be compelled to cease activity. This came shortly after JST stated in a letter to supporters that the charity had broken even for the previous year.

In its annual report published 31 March 2018 on the Charity Commission website, JST stated that “P&L remains volatile and our cash position tight (but manageable).”

None of its public communications hinted at the drama about to unfurl.

So what was the surprising appeal for?

Supporters and donors expected that their donations would secure the future of the Trust and its much-loved barques, Lord Nelson and Tenacious.

Although the fundraising announcement had stipulated ‘unrestricted funds’ were needed, it also referred to ‘substantial mechanical issues across both ships’ and supporters drew their own conclusions, right or wrong.

Affection for the Trust and its two barques ensured that the deadline was met and the target exceeded, with many small gifts and some large ones. JST’s first response was not to announce how the money would be spent, but to set up a working party to decide how to use the new funds. This immediately raised the hackles of supporters. After all, given that it was billed as an emergency, why did it take so long to decide how to spend the money raised?

In early July 2019 Duncan Souster, then JST’s CEO, enthusiastically stated that JST would be “focused on making the most of the support and ensuring we build a bright strong future for the Trust, looking at the size of fleet, how it’s deployed, and the sorts of work JST does.”

He continued: “We need to think carefully about strategy for that and to make sure we take the fleet forward in best way.”

The clue was in the thank you message ‘looking at the size of fleet’, which consisted of only two vessels. But it was still surprising to many supporters when, shortly afterwards, the trustees announced that Lord Nelson was to be decommissioned. (Efforts continue to find a home where she can be a static attraction alongside; an outline activity programme and financial model have been proposed.)

Underlying problems

The financial difficulty has been developing for years according to JST’s year-end report. The Trust was saddled with continuing debt from its heroic project in 2000, building Tenacious. Built by a mix of skilled shipwrights and unskilled volunteers, both disabled and able-bodied, there are so many unique aspects to the ship and the build that in order to comply with regulations, costs far exceeded estimates. Continued fundraising has been essential but has failed to bridge the underlying financial gap.

In recent years Lord Nelson and Tenacious have each undertaken a round-the-world-voyage intended to create new markets and new income streams, particularly in the Antipodes. Perhaps for lack of a customer base and adequate marketing neither voyage succeeded financially, and also left a backlog of maintenance.

Adding to this challenging situation, arguably an inappropriate management model was introduced. Duncan Souster was appointed in 2014. A CEO with a city background, he was at the time a trustee of the charity. Such an appointment always raises eyebrows in the charity world, even if done with complete propriety. Eyebrows were raised even further by the salary of £100k, exceptional for a charity with only £3m turnover.

A string of highly-paid appointments to new senior roles followed, more suited to a corporate body than a modest charity. By 2018 the charity visualised a staff complement of about 46, of whom as few as 18 were sea staff. The numbers were very much larger in proportion than in other sail training charities, and the resources devoted to ships and shore were reversed.

Signals that not all was well began to surface. The sea staff noted that big salaries had become the norm ashore but their terms were little improved, while they daily took personal responsibility for the lives of large numbers of vulnerable people. Routine maintenance suffered; even safety was sometimes underfunded. The sea staff had difficulties when port and other charges were unpaid. According to volunteers and staff, past and present, there was sometimes insufficient cash even for basics such as paint.

Secrets revealed and leadership upheaval

Shortly after the appeal ended, it publicly emerged that the ‘emergency’ had been anticipated. The Trust toldThird Sector journal that it had reported a Serious Incident (meaning an episode that might threaten the continued viability of the charity) to the Charity Commission in January 2019, and updated the Commission in June.

The signs were there all along, but were not communicated to supporters.

“Our financial problems are neither recent nor sudden but as one of the directors, who would be personally liable if we did not behave responsibly, I know we had no choice,” says Tom Stewart, JST Board of Trustees, on JST’s Facebook page (July 3rd), of the appeal. “We have been working hard out of the glare of Facebook to secure funding, to engage with the powerful and wealthy, and to manage our scarce resources responsibly – not sitting idly by.”

After such an upheaval it was widely expected that the CEO and chair of trustees would be replaced and indeed on 18 November the Trust reported that the CEO would step down at the beginning of December.

He is replaced by Patrick Fleming, former Director of Development at the British Library. Fleming had applied for the Development role, but was invited to take on the CEO role as well.

Shutting down speculation

No information about the financial packages for the Development or CEO post has been revealed, but JST has reacted strongly to comment and speculation. Among those looking for more information was Colette Whelan, a long-standing supporter who repeatedly queried JST’s public statements about financial and other decisions. She was told by James Crill, chairman of trustees, that her questions would no longer be answered. He claimed that the Trust was under no obligation to reveal more than is required by Companies House and the Charity Commission. Many supporters feel that, having given so generously to the Trust, it should be equally generous in explaining its decisions and reasoning.

In the absence of information, supporters and volunteers have been reaching their own conclusions. Fred Normandale is an accomplished professional fisherman, author and volunteer of over 20 years, who had vigorously challenged the course of events. He arrived to join Tenacious in Lisbon but was told he would not be allowed to sail. A defensive statement about salaries had to be issued on behalf of the Trustees about compensation, bonuses, and expenses.

Widespread concern was expressed among the UK’s other 30+ sail training organisations at their autumn 2019 meeting, that the Trust’s actions have damaged the reputation of sail training generally. In appearing to ‘cry wolf’ they felt that JST has poisoned the water for genuine emergency appeals. The Trust’s raft of highly-paid appointments is considered to have distorted expectations across the sector. The unorthodox route to appointment of the previous, and the new, CEO is felt to be pushing the boundaries of good governance.

So what really happened with the JST £1 million appeal? A charity which has done fabulous work over the years, changing lives for the better, experienced an unprecedented outpouring of goodwill. But whether the new CEO can retain it remains to be seen.

The Jubilee Sailing Trust declined to comment.