In the wake of various charities returning or refusing to accept donations from ‘The Presidents Club Charitable Trust’ scandal, the Charity Commission has published advice highlighting the sorts of issues a charity should consider when deciding whether to accept or refuse future donations, and also whether to keep or return donations that have already been accepted.
In either case, the Trustees should think carefully about what is in the best interests of their charity by weighing the potential reputational damage of accepting a donation against the financial impact of turning it down.
Trustees are reminded of their duty to report to the Commission any serious incidents which could harm their charity’s reputation.
This latest guidance serves as a reminder of the need for Trustees to have an ‘Acceptance and refusal of donation’ policy and robust decision making processes in place, considering not just reputational risks but also the impact of unreasonable restrictions being placed on a charity, and taking into account the charity’s objects, conflicts of interest and ethical policies. Where there is uncertainty, Trustees may seek legal advice and/or approach the Charity Commission for its advice and, possibly, its approval.
Returning or refusing donations may be a legal requirement, and so the Trustees’ policy and decision making should consider the identification of possible criminal or questionable activity.
Further guidance from the Institute of Fundraising can be found here.