Mermaids has launched a fundraising appeal because it says the Charity Commission’s inquiry into the transgender youth support charity is “significantly hamstringing” its services and deterring corporate partners.

The charity’s crowdfunder has been running since 8 July and has already raised more than £15,000 of its £20,000 target.

A statutory inquiry into the governance and management of the charity was opened by the regulator in November 2022, following an initial regulatory compliance case in September.

The charity said the ongoing probe was “significantly hamstringing its services, staff and volunteer wellbeing”.

The charity said: “Increasing transphobia and attacks on the trans community make Mermaids’ work more relevant and critical than ever.

“Securing funding is increasingly difficult, and corporate partners with whom we have established relationships are now hesitant to work with us out of fear of backlash.”

The regulator said at the time of opening the inquiry it was investigating whether there had been a “serious systematic failing” in the charity’s governance and management.

It said: “The regulator will seek to determine whether the charity’s governance is appropriate in relation to the activities the charity carries out, which involve vulnerable children and young people, as well as their families.”

The charity said it had been incredibly patient, co-operating fully, frankly, and openly with the regulator at all times.

It said: “But we simply can’t afford to wait any longer for the commission to publish its findings, for funders to unpause, and for things to get better in a few weeks, months or years.

“Not when trans young people are suffering right now.”

A Charity Commission spokesperson said its inquiry into Mermaids remained ongoing and it could not comment further.

The spokesperson said: “Our inquiries conclude only when we are satisfied that all regulatory concerns have been sufficiently investigated and resolved.”