MHA | Donations: new guidance on acceptance and new ‘Donate with…
NFP eNews March 2024 0

Donations: new guidance on acceptance and new ‘Donate with Confidence’ site

Posted on: March 26th 2024 · read

Earlier in March, the Charity Commission released its new 'Accepting, refusing and returning donations to your charity' guidance setting out the legal rules for trustees to consider.

The new guidance starts by reminding trustees that donations are not exclusively represented by cash, but can also include donations of land, goods or other property, and grants, and that trustees have a legal responsibility to refuse certain types of donations, such as those they suspect derive from illegal sources or come with illegal conditions and those from vulnerable donors who may lack the mental ability to decide to donate. It continues to set out types of donations that a charity is likely to need to refuse or return – such as those which may involve unacceptable levels of private benefit – and the legal rules surrounding ‘failed’ fundraising appeal, specific guidance for which was updated as part of the implementation of the Charities Act 2022.

Acknowledging that a trustee may find themselves in a potentially difficult situation of deciding whether to refuse or return a donation, having satisfied themselves that they have the legal power to do so, the guidance signposts an approach which it recommends trustees take:

  • Consider the risks involved in refusing or returning the donation, and how likely and serious these are. These could include negative financial impact, ability to deliver services and ability to attract donations in the future.
  • Consider the risks involved in accepting or keeping the donation, and how likely and serious these are. These could 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 could include negotiating the terms of a conditional donation with the donor or developing a public explanation for a decision.

It is considered best practice for charities to have a ‘donation acceptance’ (or similar) policy to ensure consistent decision making with regards to donations and to set out who should be involved in the decision-making process. The release of this guidance may act as a timely prompt for charities to review and update such an existing policy or development one if it does not already have one in place.

The release of this new guidance has also coincided with the launching of the Commission’s new ‘Donate with Confidence’ website. With increases in fraudulent fundraising activities during times of increased giving – such as at the outbreak of the war in Ukraine, as we have previously reported, and more recently during Ramadan – the website sets out a series of simple checks donors should make before donating:

  • Check the charity register
  • Find out more information about the recipient charity
  • Look out for the fundraising badge
  • Be careful when responding to fundraising appeal emails or clicking on links within them
  • Ask the collector for more information

Such a checklist will undoubtably be of interest to charities looking to provide donor confidence in their current and future appeals.

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This insight was previously published in our Not for Profit March 2024 eNews

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