This November we’re taking a deep dive into gift acceptance and due diligence. In this article, our CEO, Kerry Rock, covers the fundamentals.
Every organisation should have a gift acceptance policy – especially when it comes to major gifts. This needs to cover your acceptance, refusal and return policies and should be kept up-to-date. Your gift acceptance policy is something to be transparent about. It’s not something to hide and, in fact, it can help you build better relationships with your donors. They’ll be doing due diligence on you and having your policy publicly available means they’ll know what to expect from your organisation.
Why have a gift acceptance policy?
Reputation is a hot topic in the not-for-profit sector, and many conversations are happening around reputational risk. Charities want the gifts they receive to be from donors who are aligned with their values. This can be challenging if the charity’s values aren’t clearly articulated in its objectives, leading to conflict when deciding where the risk is and where the balance is when accepting a gift. You can’t refuse a gift without a really good reason and if you do, you need to document the research that went into the decision-making and the reasons for it. A good policy will remove a lot of the grey areas when it comes to gift acceptance and can help build positive relationships with your donors because they know exactly what they can expect in their dealings with you. So if your policy is set out, they know what’s going to happen in the due diligence process and it’s not a surprise to them.
Looking at regulations and codes of practice
When thinking about due diligence and gift acceptance policies can be overwhelming. However, when you start by referring to the available regulations and it becomes much easier to start assessing some of the reputational risks.
Relevant regulations and codes:
- The Charities Act
- Data Protection Act and GDPR
- Freedom of Information Act
- The Bribery Act 2019
- Finance Act 2011
- Proceeds of Crime Act 2002
- Counter Terrorism Act 2008
- The Charities and Trustee Investment (Scotland) Act 2005
- The Charities Act (NI) 2008
- Fundraising Code of Practice
Treat your gift acceptance policy like a working document – it should be implemented, reviewed and kept up-to-date. If you receive a gift that’s different to anything you’ve had before, review your policy to see where it fits in, if it doesn’t, it’s time to update your policy.
Can you refuse a gift?
Not usually. You need a really good reason to refuse or return a donation. It’s not something that you can do easily and it must be an exceptional circumstance. If you do refuse a donation you must keep a record of your decision on the reasons for it. You must only refund donations in line with your charitable institutions’ policies. If it is unclear whether or not you should give a refund, consider getting legal advice.
At Prospecting for Gold, we have over 25 years of experience helping charities and non-profits meet their fundraising goals. If you have a question about corporate fundraising, email info@prospectingforgold.co.uk and we’ll happily help.