Watch: Prince Harry launches ecotravel initiative Travalyst in Amsterdam
The Duke and Duchess of Cambridge's charity has been cleared of wrongdoing after it was accused of breaching the law by making a donation to a project run by Prince Harry.
However, another charity set up by Harry and Meghan after they split their work from William and Kate was found to have been operating "not in line" with charity guidance in the way it recorded spending decisions, according to an investigation.
Harry, 36, set up Travalyst, a sustainable travel organisation, in 2019, working with companies like Booking.com and Skyscanner to improve travel for tourists and communities impacted by visitors.
The Royal Foundation, which had previously represented the charitable work of both the Cambridges and the Sussexes, gave a £145,000 unrestricted grant to the latter's Sussex Royal charity, which then became the MWX Foundation, when Harry and Meghan, 39, were still senior working royals.
The Royal Foundation, which now covers only the work of William, 38, and Kate, 39, also gave a further £151,855 to Sussex Royal that was transferred to Travalyst.
Then last summer Republic, which campaigns for an elected head of state and the end of the monarchy, reported the Royal Foundation to the Charity Commission over the donations, saying the only reason for the donations was "the personal relationship between two patrons, the Duke of Sussex and the Duke of Cambridge".
The group wanted the charities investigated for "conflicts of interest, inappropriate use of funds and a lack of independence".
The investigation found all the donations were given in line with the law, and "there was no evidence to suggest that any conflicts of interest between MWX and Travalyst were managed inappropriately".
However the regulator also found that the MWX Foundation did not adequately document the decisions behind its spending, meaning the trustees couldn't explain the reasons behind all the costs.
The commission said this was "not in line" with guidance, and has offered help to the MWX Foundation as it winds up its work.
Its statement said: "The Commission noted that trustees took a decision to close this charity just 12 months after it was established, doing so during difficult and unexpected circumstances. It considers that the spending itself was not unreasonable given the unexpected events and unique circumstance which surrounded this charity and as such does not consider that further action is required.
"However, the Commission has found that decisions on spending were not adequately documented, limiting the ability of the trustees to demonstrate the reasons behind those decisions. The failure to properly record decisions does not represent best practice and is not in line with Charity Commission guidance."
Republic has offered an apology to the princes and admitted it didn't know whether its claim was true when it wrote to the commission.
In a statement, Harry and Meghan's spokesman said: "We are pleased that the Charity Commission has confirmed what we knew from the start: that MWX Foundation, formerly Sussex Royal, complied fully with UK charity law in its handling and transferring of funds and grants.
"Today’s update provides complete closure to this review and ultimately underscores both the legitimacy of the former charity and the baselessness of the claims against it."
Republic issued an apology, saying: "On 20 July 2020 we falsely claimed that the transfer of funds from The Royal Foundation to Sussex Royal and to Travalyst was improper and likely to be unlawful.
"We also wrote to the Charity Commission expressing the same points and then widely publicised our letter to the UK media without knowing whether what we claimed was true. Our intention was to draw attention to the allegations.
"We did not contact The Royal Foundation and/or Sussex Royal before going to the Charity Commission and to the media, which would have been the appropriate action.
"If we had contacted the organisations directly, we accept we would have realised quickly that there was nothing improper in their operations.
"The Charity Commission has now concluded its review and found that all activities of the charities were lawful and proper.
"We apologise unreservedly to the charities and personally to The Duke of Sussex for our actions and the public damage that has been caused as a result of widely publicised untrue claims."
Helen Earner, director of regulatory services at the Charity Commission, said: "We have found that the trustees complied with their duties under charity law, and the transfers of funds between different organisations were in keeping with the charities’ governing documents, with conflicts of interest being appropriately managed.
"The MWX Foundation should, though, have done more to document its decisions, especially regarding the charity’s expenditure on legal and administrative costs.
"We also note that a substantial proportion of funds went into setting up and then winding up a charity that was active for a relatively short period of time.
"Trustees cannot predict future events when establishing a new charity – circumstances can change after a charity has been set up.
"But all trustees, before setting up a charity, should think about the longer-term, and consider carefully whether a new charity is the best way of achieving the intended aims."
The Royal Foundation was set up to cover the work first of Harry and William, then also William's wife Kate, and then the Cambridges and the Sussexes when Harry married Meghan in 2018.
But Harry and Meghan opted to split the households in March 2019, less than a year after they married, setting up Sussex Royal.
However, after they stepped back from senior royal roles they agreed not to use the word 'royal' and so had to close down Sussex Royal. They renamed it MWX Foundation and it has subsequently ceased work.
Despite reports the MWX stood for something like 'Markle Windsor', the name was said to be a series of random letters.
When Republic made the allegations in July 2020, Harry fired back with a statement saying the claim was "deeply offensive" and called it "defamatory and insulting".
The claim was also denied by the Royal Foundation.
Harry and Meghan now run Archewell, which represents their charitable work. Travalyst was reportedly not a registered charity by January this year.
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