A late-night phone call approximately two weeks ago brought a surge of excitement. “This is unbelievable,” the source exclaimed. “Meghan and Harry are shutting down their Archewell charity, and everyone is getting fired!”

The reality was slightly different.

While the Archewell Foundation, the charitable division of the Sussex’s larger Archewell enterprise, is indeed coming to an end, it’s not quite the mass exodus it was rumored to be. There have been at least four departures, leaving just one person with the newly established Archewell Philanthropies.

Among those leaving, the most notable is James Holt, who managed the charity alongside co-executive director Shauna Nep.

In an exclusive revelation, this publication confirms that Holt has departed, planning to return to the UK after leading Archewell since 2021.

There are whispers that Holt’s decision might be influenced by visa issues, as he was the last team member remaining from the group that worked with Meghan and Harry during their time as royals.

There is also talk of Harry and Meghan being disenchanted with the performance of the charity, with one Sussex source telling me: ‘They were upset with his work. They were ready to let him go.’

Rumours said ‘Meghan and Harry are closing their Archewell charity and everyone is getting sacked!’ That wasn’t – quite – true

Other sources deny both reasons for his departure, however, with one saying the couple have always been supportive of his residence status over the years.

Both sides also issued warm statements yesterday, with Holt gushing: ‘From the moment I met Meghan, I recognised a kindred spirit – someone who finds joy even in difficult moments and connects authentically with people regardless of circumstance.’

For their part, the Sussexes said: ‘James has been a stellar support for us for nearly ten years . . . As James moves his young family back to the UK, we are proud that he will continue to guide various humanitarian trips for us overseas through Archewell Philanthropies.’

Yet Holt’s departure from their side in the US is highly significant. He was the most loyal of lieutenants, moving to California to be first their PR chief, then to run Archewell. It was Holt who told the 2022 Netflix show Harry & Meghan that there had been a Palace conspiracy against them. Once people saw their popularity, he said, ‘the aim was to put them in a box or make them irrelevant’.

He also said Brexit had whipped up a racism which had then been unleashed on Meghan – a somewhat paranoid narrative which was enthusiastically endorsed by Prince Harry on the same show.

Whatever the exact reasons for Holt’s return to the UK, there is clearly trouble at Archewell, which can be politely described as going through a period of transition.

Last week this newspaper revealed that two other junior admin staff were being axed, as was Archewell’s director of programs and operations Kristen Slevin, on a $146,000 (£108,000) salary.

And with Holt gone, too, Shauna Nep is now the ‘last man standing’ at Archewell, now renamed Archewell Philanthropies. (Nep, incidentally, also works for charities run by music mogul Scooter Braun and make-up businesswoman Hailey Bieber, so it’s not even her only job.)

The most high-profile departure is James Holt, who ran the Sussexes’ charity

Meanwhile, just before Christmas, Archewell released its annual accounts which show soaring expenses far in excess of money given out – $5.1 million (£3.8 million) expenses to $1.25 million (£925,000) handed out.

It also announced that it is moving to a new ‘fiscal sponsor model’, meaning it will no longer be an independent charity in its own right but instead operate under a sponsor’s legal umbrella and require sponsor approval for its activities.

It is explained that this will allow Archewell to spend less money on administration and thus, it appears, employ almost no staff.

The New York Post even asks whether the Archewell charitable arm is now nothing more than ‘smoke and mirrors’.

Meanwhile, I’m told by Sussex sources that the duke and duchess are planning further quasi-royal tours under the Archewell Philanthropies banner and that the charity work will continue.

But what has happened at Archewell raises a number of questions about the viability of Prince Harry and Meghan’s costly decision to act as royals-in-all-but-name, and about what they will do next.

Their accounts – released on the same day as the Epstein files – show some spending which you might find remarkable.

Archewell Foundation, for instance, reveals it has spent more than $1 million (£741,000) on ‘programmatic strategic support’ to outside agencies, including the PR firm M&C Saatchi.

And those tours to Nigeria and Colombia? The couple brought a lot of attention to both countries, but it seems they kept their pockets firmly zipped. Only $10,000 (£7,400) was granted to organisations in sub-Saharan Africa and only $8,310 (£6,150) to organisations in South America.

The charity, named partly in honour of their son Archie, set out its mission in 2020 to ‘show up, do good’ – and added, with a Californian flourish, that it’s ‘more than a handout, it’s a hand held’.

When it was founded, the couple said its name was derived from ‘arche’, an ancient Greek word meaning ‘source of action’, and ‘well’, symbolising ‘a plentiful source or supply, a place we go to dig deep’.

But, alas, plentiful supply has been an issue.

The Archewell Foundation is separate from Prince Harry’s long-standing work with the Invictus Games, and from his one-time involvement in the Lesotho-based charity Sentebale, and his directorship of the controversial charity African Parks.

It serves as a portmanteau organisation for their conspicuous good deeds, to which, we’ve long been told, both are utterly dedicated. Indeed, they snapped back at the late Queen, after she announced they would relinquish their charitable patronages when stepping back as working royals: ‘We can all live a life of service. Service is universal.’

Indeed, those royal patronages were replaced by a commitment to a number of causes – most prominently to battling ‘online harms’ with other charities such as the ParentsTogether Foundation, which received a small $25,000 (£18,510) donation.

Holt with Prince Harry in 2022 at the Invictus Games in the Netherlands

The largest donation was of $150,000 (£111,065) to the charity Screen Sanity.

The story told by the four sets of accounts filed by the Archewell Foundation since its inception is of just one bumper year of donations, and thereafter of considerable costs and small grants only.

And – because of the large expenses – it is not a sustainable model. In 2021, they started out with a bang with a donation of $13 million (£9.6 million). This fell to $2 million (£1.5 million), rose to $5.3 million (£3.9 million) and fell again back to $2.1 million (£1.6 million) in the most recently reported filing.

Why haven’t they been able to sustain that initial high level of donations? After all, they have many super-wealthy friends – like Oprah, make-up titan Victoria Jackson, TV mogul Tyler Perry and even software entrepreneur and owner of Time magazine Marc Benioff.

But many of these people have their own charities and foundations, and as time has gone on – and the couple have chewed their way through almost a dozen publicists – their image has become ever less saintly.

As The Hollywood Reporter magazine observed in 2023, they ‘fled a life of ceremonial public service to cash in on their celebrity status in the States’ and now ‘the Harry and Meghan brand has swelled into a sanctimonious bubble just begging to be popped’.

It feels undeniably odd when Meghan returns to Instagram to try to sell items from her commercial brand As Ever while the couple simultaneously call out social media and praise Australia’s ban on Instagram for the under-16s.

Former Archewell director Holt on Netflix’s Harry & Meghan documentary in 2022

Not to mention the awkwardness of preaching the importance of kindness and connection when both are estranged from some of their family members.

It can only be to their credit that Prince Harry and Meghan have continued to speak at events like World Mental Health Day, and to make grants to their causes, and to support other charities at other events.

When you are making grants of a relatively modest $1.25 million (£925,000), you might think that the charity can go on for ever at that level. But the recent filing of accounts shows the undeniable problem – the Archewell Foundation expenses are up 54 per cent on the previous year, from $3.3 million (£2.4 million) to $5.1 million (£3.8 million). It’s been enough to land the charity $2.5 million (£1.8 million) ‘in the red’, and to dent their reserves, which are down to $8.5 million (£6.3 million).

So how can they continue? A source told the New York Post: ‘The big question was, would Archewell close, or would another charity take it over? Harry and Meghan were looking to get a fiscal sponsor, someone to take on the outgoing costs and to keep things cheap.’

So the rather painful answer has been retrenchment – goodbye to all those staff, even James Holt – and a pivot. Archewell Philanthropies will focus on the same causes of mental health, responsible technology and community wellbeing, but it’s going to be more about impact than operations, said a source.

So there will be more speeches, less spending. They are going to become a charitable minnow, under someone else’s umbrella.