Charities at Risk As Diana Fund Freezes Grants

More than 100 charities could face closure or severe cutbacks following a decision by trustees of the Diana Princess of Wales Memorial Fund to freeze its grants to preserve its assets, in the latest stage of a long-running battle against a US corporation making memorabilia of the late princess.

The fund has appealed to other charities and grant agencies to help bail out small charities dependent on its funding but has warned that hundreds of jobs may be at risk if its legal battle in the US courts fails.

The fund is being sued for $25m (£15m) by the Franklin Mint, a Californian-based corporation which specialises in making and selling souvenirs of personalities, following the failure of the trustees’ bid to stop it cashing in on the princess’s memory three years ago.

The corporation wants the money, which would otherwise be spent on charitable work around the world, in compensation for what it claims is the damage done to its sales efforts and reputation and for the “embarrassment” it suffered.

It also emerged that the trustees could be personally liable if they are successfully sued by the Franklin Mint.

Andrew Purkis, the fund’s chief executive, said: “I think you will have to point the finger particularly at a big American corporation, which already had its victory and had all the dues paid to it in court, launching a quite unnecessary malicious prosecution suit against a charity which is doing fantastic work among the most vulnerable people in the world. If you really have to get into the blame game, look at that.”

Among the 120 charities assisted by the fund are those closely associated with interests shown by the princess before her death, including HIV/Aids, landmine and cluster bomb clearance and a relief fund for the families of prisoners.

The fund has paid out £40m in grants over the past five years, with a further £10m promised to charities. It was expecting to disburse £4.5m before the end of this year.
It has already had to pay out £4m in legal costs.

Lucy Gampell of the charity Direct Action for Prisoners’ Families told the BBC’s Breakfast programme that her organisation was facing the loss of a quarter of its annual budget. “I had to tell all my small staff team, who are all very hard-working individuals, that every single one of them is going to have to go on to reduced working hours because it’s either that or making one person redundant,” she said.

“It also means that we will have to cut a number of our services … It’s a huge amount of money to lose.”

In a statement, the fund said its decision to freeze funding had put its trustees in a “most painful legal and moral dilemma as to whether to continue grants or retain all such money in the fund until the legal position becomes clearer … the fund is legally obliged to freeze not only new grants but the payment of existing grants.”

The problem, which could see the collapse of the fund and the loss of 500 jobs, stems from the fateful decision taken by the trustees in 1998 to try to stop the mint cashing in commercially on the princess’s memory. But its claim that the mint was engaged in unfair competition, false advertising and trademark dilution was thrown out in 2000 by a US district judge, who said the princess had done nothing to prevent others from using her image while she was alive.

Dr Purkis told the BBC Today programme: “We are going to ask a range of different grant-giving bodies if they can replace the funding, if we can no longer fund it from our own assets, and then when our assets are unfrozen again we will of course reimburse them. There would be a very good chance they will get their money back, with interest if they want it. The worst outcome for them would be that they would end up paying a very good grant.”

He added: “At the time the trustees were doing what they thought was right for the memory of the princess. It is only with hindsight that it is clear it was a mistake.”

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