The extensive media coverage of the Presidents Club story from earlier this year served as a timely reminder that charities have to think carefully about the donations they accept, and when they might refuse or return them.
The press coverage, public reaction and commentary from all parts of society showed that the reputation of charities and the ethical issues involved in fundraising are fundamentally important.
Charities exist to make a difference in the world, and that requires making sure there is enough money and resource to be able to do the work they need to. But, sometimes there are other considerations that can be more important – the value of donation may not always be worth the cost in terms of a potential loss of public trust and confidence, reputational damage or a conflict with the charity’s ethics, values and vision.
It’s important that charity trustees are aware of where donations come from – not only because they must be legal and safe, but also to make sure the source of the funds is in-line with the charity’s values.
So, what do charities need to think about when dealing with donations?
1. There’s not always an easy ‘yes/no’ answer
When difficult situations arise, there isn’t always a straightforward ‘right or wrong’ response. Deciding to refuse a donation is a hard thing to do, and you will need to weigh the relevant factors carefully. Some organisations may well legitimately come to different decisions about the donations they choose to accept or refuse, so you need to be thinking about what is best for your cause.
2. Take time to think it through
It’s really important to ensure decisions about accepting, refusing or returning donations aren’t made on an ad hoc basis. They need to be grounded in the agreed objectives of the organisation and according to any gift acceptance policy that your charity has. It’s also important to remember that, often, these decisions will be made based on potential future risks that you’ve identified, rather than on hard facts and evidence. Be prepared to think about the following questions: do we know how this money is being raised? What would our current supporters think about this donation? Are there any clear conflicts with the source of the donation and our charity’s mission?
3. Develop a clear policy and process…
Donations can, and should, only be refused or retuned in exceptional circumstances. Having a policy that clearly lays out the organisation’s position can help to ensure a joined up and consistent approach across the organisation and that if or when donations are turned down they are done so for the right reasons and in the right way. Have a think about who should be involved in drawing up and approving this policy (e.g. legal, finance and policy professionals, and your trustees). Consider whether there are specific industries or activities that run counter to your objectives. What kinds and sizes of donations will your policy apply to? What will your position be on accepting donations from potentially vulnerable donors?
4. …and use it!
Once you have an agreed policy and process, it’s important to ensure that it’s complied with and applied correctly and consistently. Make it available to everyone in the organisation who might need to use it so they can be clear on what is expected of them. And, whatever you decide to do, keep a careful record of the rationale behind each case.
Having a policy and process won’t mean that these tricky situations don’t arise, and it won’t necessarily prevent some people from disagreeing with the decisions you’ve taken. But, it will help you to provide clear, unambiguous explanations that make your decisions clear and understandable, and therefore more justifiable/credible to both your supporters and the wider public.
Make sure you are able to demonstrate how a particular decision has been reached, and that any discussions at trustee level are minuted and recorded so you can demonstrate how any particular decision was made with the charity’s best interests in mind.
5. Always have your charity’s best interests in mind
Whatever their cause, area of work or beneficiary group, charities are delivering services, campaigning and supporting individuals and communities – that’s why fundraisers are so passionate about developing great relationships with their supporters. But while money and resource is crucial, you need to always be thinking about what is in the best interests of the charity overall.
These aren’t easy decisions, which is why we’ve put together some new guidance to help charities, fundraisers and trustees know how to deal with these situations. It outlines the rules and principles that you need to know, the questions you need to think about, and provides practical help and advice so that you can make the right decision for your charity.
The IoF has today released updated guidance on acceptance and refusal of donations. The guidance aims to help trustees and fundraisers make clear and consistent decisions regarding accepting or refusing donations. You can view the guidance here.
Stephanie Siddall is policy manager at the Institute of Fundraising. You can tweet her at @stephsiddall.