Source: Charity Commission published on this website Tuesday 5 March 2024 by Jill Powell
On Monday 4 March 2024), the Charity Commission has published new guidance to help charities when deciding whether to accept, refuse or return a donation.
The regulator’s guidance makes clear that trustees should start from a position of accepting donations, but from time to time a charity may face a difficult decision as whether to refuse or return a donation. The guidance is designed to help trustees have informed discussions when faced with a choice that has potentially significant consequences.
The Commission has set out an approach for trustees to take on these occasions, advising they:
- consider the risks involved in refusing or returning the donation, and how likely and serious these are. These include negative financial impact, ability to deliver services and ability to attract donations in future.
- consider the risks involved in accepting or keeping the donation, and how likely and serious these are. These include the likelihood of reduced support or reputational harm, particularly among supporters or beneficiaries.
- determine how any decision aligns with their charity’s purposes.
- determine what steps they can take to mitigate the risks. These include negotiating the terms of a conditional donation with the donor or developing a public explanation for a decision.
The regulator also warns trustees not to allow their personal views, or any external pressures that do not relate to their charity’s purposes, to influence them to act in a way that is not in their charity’s best interests.
The guidance reaffirms the importance of following existing principles which trustees must use when making any decision that will impact their charity. These principles help to ensure trustees are acting reasonably and serve only their charity’s best interests. If followed correctly, any choice will be adequately informed and evidenced.
The guidance adds that trustees should take enough time to allow sufficient information to emerge, should balance short and long-term risk and allow trustee boards to ask questions and challenge assumptions.
