Charity Commission Chair weighs in on the ethics of charitable donations
17 November 2023 | By Rebecca Ward
Many will have seen the article published by the Guardian on the 9th November, in which the current Chair of the Charity Commission weighs in on the debate regarding the ethics of accepting or refusing charitable donations.
The article recalls how he recently challenged trustees who may be refusing charitable donations on the basis that their own “personal worldviews or preferences” are incompatible with those of the donor – be the donor a corporation, wealthy philanthropist, or trust. The comments are a warning to trustees that, if they are rejecting donations, they must have a very good reason for doing so.
Speaking as a trustee, it’s difficult to know how to respond to this. The comments strike a chord, for sure. For a whole host of reasons trustees are understandably risk averse, including some high-profile cases of ‘dodgy’ donations, as well as a general awareness of ‘cancel culture’ and how easy it is for reputational damage to occur. We want to be sure that we are following proper due-process, and that we are putting the integrity of the charity above financial gain.
“Thinking back to when I first became a trustee myself, this wasn’t a mainstream concern; many charities saw maximising their short-term income for the cause as being straightforwardly in their best interests. What we’re seeing now suggests trustees are listening to an increasingly civic-minded and conscious public, and thinking about how they can best live their charity’s values and stay true to their raison d’être.”
For arts charities, the issue of ethics is arguably more pronounced: with an added layer of sensitivity often caused by an intrinsic desire for art to be ‘clean’ and for artists to operate the ‘moral high ground’.
Unfortunately, the comments from the Charity Commission Chair run the risk of oversimplifying of a complex issue. To support charities and trustees, what is needed is a robust consideration of ethics in general and guidance on how we might put in place certain policies or decision-making frameworks to enable us to face these challenges with confidence. Aside from the odd article, the Commission has been notably brief with regards to these issues to-date. So why is it front of mind now?
Of course, we are currently facing an extremely competitive funding landscape. There are warnings that some charities in England are on the brink of insolvency due to the inadequacy of public funding. The Charity Excellence Framework believes that cuts to public funding for charities is estimated at £1bn p/a, and that there is a high risk of widespread charity closure. And in the arts some former National Portfolio Organisations, that lost significant amounts of Arts Council England funding in 2023, are shutting down. In this context, as a trustee, we of course have a responsibility to ensure our charity remains solvent, and therefore we should absolutely have a very good reason to reject large amounts of funding. However, we also need to be thinking creatively about how we can support our charities to secure private funding that is ethical and protects our values and reputation.
The bottom line is that charities exist to serve public interest. I’m sure most of the public would be reassured to know that many large charities have donation policies in place, demonstrating that they have spent time thinking through a process by which they filter decisions about large donations, ensuring that any donation received doesn’t clash with the mission and values of the charity. The charity, Save the Children, for example, refuses to accept donations from individuals or corporations whose wealth is built on activities that are harmful to children, such as pornography, tobacco, arms manufacturing, and carbon intensive fossil fuels. The National Portrait Gallery has a grants and donations policy that prevents it from accepting donations that would significantly damage the effective operation of the Gallery and its mission. One must surely look at examples such as these and agree that this is a good thing. Public trust in charities hit a crisis around 2015-2020, and we must be mindful of rebuilding this carefully if the sector is to have a positive future.
The reality is that ethical decision making is a delicate balancing act. Trustees need to be having robust conversations, and ideally to be creating a policy or framework for decision-making. This policy should set out the purpose of the document, who is responsible for upholding it, and the procedures trustees will take to uphold it (e.g., an ethical steering committee). This would also help to support staff within the organisation so that they know when and when not to involve trustees (to some extent, we should expect management staff to be capable of carrying out due diligence on donors for smaller donations that pose less reputational risk).
“If we start to pick and choose what is right and wrong from an artistic perspective or a funding support perspective, where do we stop? The trustee who objects to taking money from a bank, should also surely have the same stance to taking a major individual gift from a banker?”
There is no easy, ‘one-size-fits-all’ approach. The Charity Commission cannot immunise trustees from wider criticism, and we should steel ourselves against being too sensitive to public opinion. As ever, what is important is that a proper decision-making process is evidenced and that trustees can demonstrate that they are acting in the charity’s best interests. The conversation needs to continue, and as such the Commission’s promise to produce further guidance is welcome.
My recommendations are as follows:
- Set a clear policy (templates below to help)
- Join-up with others to continue the conversation and explore best practice
- Keep personal views to one side and focus on the best interests of charity / the charity’s public benefit
- Keep up to date with guidance
Are you a trustee? What would be most helpful to you? Let us know via email@example.com
As a result of our Ethics Enquiry cohort, Arts, Fundraising and Philanthropy have produced a series of resources to support organisations with ethical fundraising, including an Ethical Fundraising Policy Template, and a step-by-step guide to creating your ethical fundraising policy. To find and download these, visit our resources page here.