NEW GUIDANCE ON ACCEPTING AND REFUSING DONATIONS

The Charity Commission for England and Wales has recently updated their guidance on how trustees should approach the question of accepting or refusing donations. While this guidance is aimed at charities in England and Wales, it contains useful principles for those in Scotland. In the current global political climate, charity trustees are increasingly aware of the perils of accepting or refusing donations from organisations or individuals whose views may not align with those of other stakeholders or with sections of the general public. The guidance highlights how to manage those situations, and also more general scenarios which will affect the third sector.

This article provides a summary of the key points contained in the guidance but if you wish to read further into the topic, the guidance can be found here.

As mentioned above, trustees may need carefully to navigate around global political issues where they affect their charity’s activities, public relations, or the acceptance and refusal of donations. This is a point also made by the Office of the Scottish Charity Regulator in its recent guidance for trustees on both the Israel-Gaza conflict and the war in Ukraine. Both OSCR and the Charity Commission are aware of the potential snares charities face when handling such sensitive topics. Anticipating this, the Charity Commission has cautioned trustees not to allow their personal views (political or otherwise), or external pressures which do not relate to their charity’s purposes, to influence them to act otherwise than in their charity’s interests. The Charity Commission recommends that charities should have policies in place which charity trustees can follow and refer to. That is intended to help a board to identify where the charity’s compass is pointing when difficult moral questions arise. The goal is to help to ensure that trustees are acting reasonably and serving only the charity’s interests. If such a policy is framed and followed correctly, any choice should be more adequately informed and evidenced.

As with every decision made by a trustee board, the charity’s purposes have to be considered. Aligning any decision on the acceptance or refusal of a donation with the charity’s purposes should ultimately further the charity’s purposes. For example, if a charity which supports those affected by alcoholism is approached by an alcoholic drinks company with a donation, refusing the donation may well be entirely in line with the charity’s purposes. The acceptance of such a donation, on the other hand, could have greater repercussions in terms of loss of support from other donors, and poor optics reputationally when viewed by third parties.

It is important for trustees to consider the risks involved in refusing or returning any donation, and how likely and how serious those risks are. Trustees should take time to consider all the relevant facts, and proceed with their decision-making only once they have all the facts in front of them. Balancing short-term risks against longer-term impact may take time, but taking that time should allow all board members the space to consider and reflect on the most appropriate decision.

The law is clear that trustees should start from the point of view of accepting a donation. Where doing so would have far wider repercussions than monetary gain, this updated guidance empowers trustees to make an alternative decision: one which is right for their charity.