The membership body has collated and updated guidance on accepting and refusing donations, stressing the importance of adhering to a charity’s purpose as set out in its constitution.

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New guidance for charities has been produced advising them on when to consider returning or refusing a donation or offer of sponsorship.

Created by the Institute of Fundraising (IoF), the guidance outlines relevant legal principles and aims to provide practical help “so that you can make the right decision for your charity”.

“While it is true that the more money a charity has the more they can do, there can be times when it is right for a charity to not accept certain donations, or to return those that have already been given,” the report reads.

“The value of a donation may not be worth the cost in potential loss of public trust and confidence in the charity, a detrimental impact to the reputation of the organisations, or a conflict with the charity’s ethics and values which could lead to a loss of support in the future.”

The guide’s publication follows research by AP into the ethics of arts sponsorship, which found the vast majority of arts workers are concerned about the potential for reputational damage when accepting offers of support but just one in four arts organisations have an ethical fundraising policy in place.

Refusing donations

Chief among IoF’s recommendations is that all accepted donations must be in strict adherence with a charity’s mission, as set out in its constitution.

To this end, it concludes that while ethics and values “will be important” in reaching decisions to accept or refuse donations, they “cannot be the decisive factors”. Instead, the guide advises, a charity should only reject an offer of support “in exceptional circumstances” if acceptance would be detrimental to the achievement of its purposes.

“This anticipated detriment must be set against the benefit of having the funds from the donor, which would enable the organisation to pursue its purposes,” it says.

It also offers advice on developing a clear donations policy, saying this would help ensure decisions are more intelligible and made on the basis of objective standards rather than on an ad hoc basis.

Charities are encouraged to consider how a new policy would relate to other governance documents, and questions including:

  • Who should lead on its creation
  • Whether the policy should be publicly available
  • Whether there are specific industries that run counter to the charitable objectives
  • Who will have power to endorse the policy and make the final decision
  • What a suitable timeline for reviewing donations should be.