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• £520,000 in donations for foundation held back • Charity’s projects run ‘with due diligence’ The glowing image of Innocent, Britain’s biggest smoothie maker, has survived most knocks, including exploding bottles in 2007 and a Coca-Cola buyout last year. The company’s blend of natural ingredients and chatty branding, helped by a pledge printed on its bottles to donate 10% of the profits to charity, have seen off all comers. But perhaps proving that charity begins at home, Innocent has held on to £520,000 pledged to its charitable foundation in 2007, and has not donated a penny since 2008. Most of the company’s charitable giving, which is also promoted on its website, is channelled through the Innocent Foundation, which funds development projects in the countries where Innocent sources its fruit. The foundation funds other charities working on sanitation, health care and microfinance. The charity has received no funding from Innocent in recent years as the company’s expansion drive across Europe, coupled with wider economic downturn, meant it delivered no profits between 2008 and 2010. Analysis of documents filed at Companies House and the Charity Commission reveal that Innocent also clung on to the lion’s share of the donation pledged to the foundation from 2007, a year in which the company made record profits and the parent company, Fresh Trading Limited, paid out £12m in dividends to Innocent’s directors and other shareholders. Innocent made a profit of £8m in 2007 and assigned £650,000 of this to its foundation. An additional £100,000 was given to Age UK, making a total contribution of £750,000 – a little short of the promised 10%. Innocent had, however, in other years, donated more than 10% of profits. However, £520,000 donated to the foundation was retained in Innocent’s bank account in the form of a loan from the charity, whose trustees are Innocent’s three directors: Adam Balon, Richard Reed and Jon Wright. Innocent says the money is owned by the foundation and was held by the company because it could garner twice the rate of interest offered by commercial banks. It accepts that if the company went bankrupt the charity would become one of its creditors, but says there has been no point where the company could not or would not pay that money if needed. The loan was interest-free for all of 2008, but the charity charged an interest rate of 2% in 2009, accruing £10,400 of interest. Innocent acknowledges that the arrangement financially benefits the company, but says this benefit is small, shared by the charity, and was not the motivating force. The Innocent Foundation has substantially reduced its spending in recent years. In 2008, the charity had pre-committed to spend £274,000 funding development projects. By 2010, this figure had fallen by more than half, to just £129,000 of planned spending. Innocent was hard hit when its European expansion in 2008 failed to quickly deliver profits amid a financial crisis and slumping smoothie market. Sales fell sharply and the firm made an £8.6m loss in 2008. It has failed to make a profit since then. The company was left with £1.3m in cash at year-end in 2007, and £425,000 – less than the sum held on behalf of the foundation – at the end of 2008. Innocent received a welcome cash boost in 2009 by selling an 18% stake of its business to Coca-Cola. At the end of year in 2009, Innocent had a very healthy £32m in the bank. Coca-Cola increased its stake in the firm to 58% last April, in a deal valuing the company at around £180m. A spokeswoman for Innocent said the company’s commitment to charity was “true and decent”. She said the foundation benefited by allowing Innocent to look after its money, explaining that Innocent’s bank account accrued more interest than that of the charity. She expressed regret that an “oversight” had led to no interest being paid to the foundation in 2008, and said the charity would be invoicing Innocent for the £5,000, which would have been accrued were interest charged at 2%. Innocent also announced it would be making a voluntary contribution to the foundation of £250,000 for 2011 – despite the firm not being expected to turn a profit – so the charity could continue its current “optimum” level of work. This would continue as a running pledge, the spokeswoman said, adding that if Innocent turned a profit, more would be donated. The remaining £520,000 would be transferred to the charity over the next three years, she said. Linda Parry, who manages the Innocent Foundation, said: “We want to run efficiently and with due diligence. One of our mottos in doing that is to keep things simple. “We try not to manage more than 15 projects at one time, as more than this would require a team to run the project, and, at present, it can be managed be me, part-time, with volunteer support. If spending has dropped, it’s as a result of our funding more pilot projects, with a maximum of £20,000 over three years rather than our absolute cap of £60,000 over three years per project. “We placed the money concerned in the Innocent bank account as we received a better rate of return this way. We looked at balancing the time and cost-benefit of looking into more options, but at the time this really felt like it was the best deal. It’s just the way we chose to manage things. If we had spent all of the money in one go, what would we do now to fund future projects? “Whether our trustees being the directors of Innocent is a conflict of interest is on the risk report we produce. But we do have two [Innocent] staff members who also take an active role on the board. I don’t see any conflict of interests.” A spokeswoman for the Charity Commission said: “We are looking at concerns raised regarding … the Innocent Foundation to see what, if any, role there is for the commission. This does not mean that we are investigating the charity.” Charities James Ball guardian.co.uk