At the heart of charity operations lies the acceptance and management of donations. However, not all donations are straightforward. The Charity Commission offers essential guidance on when charities may return donations, ensuring compliance and ethical decision-making. Trustees are reminded of their fiduciary duties, emphasizing the importance of prioritizing the charity's best interests and legal obligations over personal preferences.

Key Recommendations for Charities:

1. Establish Clear Donation Policies:

•   Consider adopting or reviewing policies on accepting, refusing, and returning donations, aligning with the Charity Commission's guidance.
•   Tailor policies to your charity's operations and donor base, drawing from past experiences to inform decision-making.

2. Strengthen Due Diligence Processes:

•   Enhance due diligence procedures to focus on gathering relevant facts concerning incoming donations.
•   Ensure thorough assessments to mitigate risks associated with accepting donations.

3. Evaluate Contractual Clauses:

•   Review contractual clauses governing donation acceptance to allow for potential returns in accordance with the Charity Commission's guidance.
•   Ensure flexibility while protecting the charity's interests in future scenarios.

4. Consider Tax Implications:

•   When contemplating donation returns, assess potential tax consequences.
•   Ensure compliance with tax regulations and consider the impact on the charity's financial stability.

In Conclusion:

Navigating the complexities of donation management requires careful consideration and adherence to regulatory guidance. By implementing these recommendations, charities can uphold their fiduciary responsibilities, mitigate risks, and maintain trust with donors and stakeholders. We invite trustees to familiarize themselves with the Charity Commission's guidance and collaborate with our team to develop tailored strategies that align with their charity's mission and values.