The recent events surrounding the Presidents Club Charity Dinner have brought to light a difficult situation that trustees of any charity may find themselves in (albeit on, hopefully, rare occasions) – i.e. where they are offered or receive funds from a source which has the potential to damage the reputation of their charity.
Trustees may be concerned that they have inadvertently accepted funds from such sources but have taken the decision not to return them, judging that the financial benefit of the donation outweighed the potential reputational impact of their source.
Trustees should be reassured that whether to accept or return, such funds is essentially a matter for their discretion. While trustees are permitted to return funds on the basis of the manner in which the funds were raised, they will not necessarily be under an obligation to do so, and should always seek to take the decision that will most effectively promote the best interests of their charity.
The Charity Commission released new guidance on 26 January 2018 which can be found here.
In this guidance, where trustees are not sure of their position, they are encouraged to seek guidance from the Charity Commission in the first instance, who will also be able to advise if its authorisation is required before the funds can be returned.
If you have any queries about this issue, or are seeking guidance on whether to accept or return funds from a potentially damaging source, do get in touch with our charity team.
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