Oxfam scandal: rich donors to big charities will face tighter checks in wake of Oxfam prostitution claims

Big-name charities could face more stringent monitoring from wealthy donors in the wake of the Oxfam scandal, analysts have warned.

Oxfam has recently been under fire over accusations it covered up claims that staff used prostitutes while delivering aid in Haiti.

Now wealth managers and philanthropy heads have warned the revelations could see stricter monitoring of charities before rich donors part with their money, the Financial Times reports.

Tom Hall, head of philanthropy services in the UK at UBS, told the paper: “Stories like (Oxfam) reinforce the need to have more rigour around one’s philanthropic investment, particularly at the higher end.”

It is thought stricter due diligence in the sector could particularly hit large charities, which according to the paper receive almost half of the sector’s income while making up just 1% of charitable organisations in the UK.

Michael Maslinski, a partner at Stonehage Fleming, compared the situation with big banks, saying smaller institutions are usually subject to more monitoring as people “take the larger ones for granted”.

He told the Financial Times: “I am absolutely certain that when it comes to reviewing charitable donations, the monitoring criteria are bound to be strengthened. It’s rather like big banks - people do a lot of monitoring of the smaller ones but they tend to take the larger ones for granted until it’s shown to be otherwise.”

The comments come as Oxfam officially released the findings of its 2011 investigation into the Haiti sex scandal.

It concluded charities should be warned about “problem staff” despite several people at the centre of the allegations subsequently taking up roles in the aid sector.

The report detailed four dismissals and three resignations over allegations ranging from the use of prostitutes on charity property to sexual exploitation of employees.

In a statement, Oxfam said: “We are making this exceptional publication because we want to be as transparent as possible about the decisions we made during this particular investigation and in recognition of the breach of trust that has been caused.”