Following the scandal over sexual harassment an an event organised by Presidents Club, and the collapse of the charity, national voluntary sector network NCVO has provided useful advice about donations. Most of our members in Redbridge are small organisations, and the world of glamorous dinners hosted by TV stars might seem to have nothing to do with us. Certainly, we see no sign of anything resembling such an event in Redbridge. But the scandal does highlight the need for all organisations to have clear policies when it comes to accepting donations. Karl Wilding, NCVO's Director of Public Policy and Volunteering, writes as follows:
I think that we have all been appalled by the revelations from the Financial Times’ investigation into the Presidents Club Charitable Trust’s Annual Fundraising Dinner.
NCVO will always make the case to the public that charities work to high ethical standards. In a series of interviews with the media we have made it clear that such shameful behaviour is unacceptable and that no charity would condone it or wish to be associated with it. You can read our full statement on our website.
But we know dealing with some of these issues can be complicated, so we wanted to offer some pointers to help with any questions which might arise.
Accepting, refusing and returning donations
First, this is an important reminder for all charities to have clear policies on accepting or refusing donations.
In this case, we would say charities should think carefully about whether it is worth damaging their reputation by accepting such a donation. For charities who have already received a donation, the situation is likely to be less clear-cut: some may have already spent the money to help children in need.
The Charity Commission has now published advice about returning donations from the Presidents Club Charitable Trust. The Institute of Fundraising also has guidance which may help charities, as does the Code of Fundraising Practice. Please get in touch with us if you have any questions.
Due diligence: investigating donors beforehand
The question of what level of checks on donations is appropriate is complicated – just having previously accepted a donation from the Presidents Club Trust doesn’t prove current checks are inadequate. Nonetheless, this is a reminder for some charities to consider whether they have the right policies in place.
The Charity Commission states trustees should have reasonable assurance that a donation is not from any illegal or inappropriate source. Our template controls on income policy can help. The policy includes a statement on due diligence and ensuring donations fulfil the charity’s mission, are not in conflict with its values and do not present a risk to its reputation or independence.
As a rule, the appropriate level of checks is likely to be proportionate to the size of the donation. Different kinds of donations will also present different kinds of risks. Charity Commission guidance on due diligence (pdf) and on ‘knowing your donor’ (pdf) may assist.
The Institute of Fundraising also has guidance on working with corporate partners.
Although it wasn’t whistleblowing which brought the behaviour at the Presidents Club Dinner to light, charities should have procedures for people to report reasonable concerns. NCVO members can access our template policy, which will help you consider whether you need to amend or develop your own.