Princess Diana charity warns of funding crisis

The Princess of Wales Memorial Fund has said that legal action it faces in the US could threaten its continuing support for charitable causes – and put around 500 jobs on the line in the UK.

Franklin Mint, a producer of Diana merchandise such as dolls, plates and jewellery, has launched a $25 million suit against the Fund, claiming that a previous attempt by the Fund to seek legal action was "malicious".

The Fund originally sued the Franklin Mint but in the end they lost the case and paid in full the court award against them.

Dr Andrew Purkis, the Chief Executive of Fund said today that its commitments were "in jeopardy" due to the action.

In a statement, he said: "This position has put the Trustees and former Trustees of the Fund into the most painful legal and moral dilemma, as to whether to continue grants or retain all such money in the Fund until the legal position is clearer. It has now been established that, in fact, the Fund is legally obliged to freeze not only new grants but also payment of existing grants."

The Fund said that it was determined to find other ways of honouring existing grants commitments to over 120 organisations and has launched a rescue plan, to try to restore the flow of money to beneficiaries. The rescue plan also aims to ensure that a freeze on new grant giving would remain a temporary arrangement.

The Fund has said that it is entering into "urgent negotiations" with a variety of grant-giving organisations and discussing arrangements whereby they can provide money for the Fund's funded projects, to be reimbursed by the Fund in due course.

Dr Andrew Purkis said: "During this period of acute uncertainty, we are inviting our fellow grant givers to come and replace any funding which we are forced to withhold from these vitally important projects in the UK and overseas."

In the five years since it was created, the Fund has pledged £50 million in grants with £40 million received by beneficiaries.

(GMcG)