Refusing and returning charitable donations: Legal framework and best practices
· Posted on: March 18th 2025 · read
In recent discussions within the charity sector, understanding how to appropriately refuse or return charitable donations has increased in importance.
Charity Commission guidance first released in Spring 2024 outlines the necessary legal framework and best practices charities must follow to ensure that they are compliant with regulations while also safeguarding their reputations.
Key Points:
- Legal Considerations: Charities must ensure that any decision to refuse or return a donation aligns with their governing documents and charity law. Failing to do so can lead to legal complications and potential breaches of fiduciary duties.
- Due Diligence: It is essential for charities to conduct proper due diligence when assessing donations. This includes ensuring that donations are not tied to illegal activities or donors whose background might present reputational risks.
- Clear Policies and Procedures: Charities are encouraged to establish clear, written policies and procedures regarding donations. These policies provide transparency and consistency, ensuring that all donations are reviewed fairly and according to established guidelines.
- Reputation Management: One of the most critical factors in deciding whether to accept or return a donation is the potential impact on the charity’s reputation. Charities should assess how accepting certain donations might influence public perception and stakeholder trust.
The evolving landscape of public expectations regarding charitable donations presents a challenge to charities, which face criticism for both refusing and accepting funds from sources such as oil companies, drug companies and organisations with links to conflict zones. This guidance is useful for charities looking to mitigate risks associated with such donations. By following the legal framework and adopting best practices, charities not only stay compliant with the law but also preserve the trust of donors and the public.
