Compliance rarely makes headlines, but when it does, it has a huge impact on our sector.
Many of the due diligence processes, gift acceptance policies and governance frameworks charities rely on today were shaped by moments when something went wrong. These three controversies changed how the sector thinks about compliance.
The Sackler family
The Sackler family built a substantial part of their wealth through the pharmaceutical company Purdue Pharma, which launched the prescription painkiller OxyContin in the US in 1996. As their wealth grew, so did the family’s commitment to philanthropy. Through the Sackler Trust, they donated hundreds of millions of dollars to museums, universities, hospitals, and medical research around the world, including many organisations in the UK.
As the opioid epidemic worsened, journalists and campaigners increasingly linked Purdue Pharma’s marketing of OxyContin to widespread addiction and overdose deaths. By 2018, UK institutions were under growing pressure to decide whether accepting further donations was compatible with their values.
The Sackler controversy changed the questions charities were asking. Whether or not a gift was legal was no longer enough. Organisations also had to consider the reputational impact of accepting a gift.
- Could accepting a gift from a donor damage public trust?
- Does the donor’s reputation align with our values?
- Would accepting this donation undermine our mission?
It’s interesting to note how a story like this continues to develop, as charities revise their views and a number are now reconsidering accepting gifts from this source. This demonstrates the need to keep Due Diligence reports and decisions under review.
The Presidents Club
From 1986 to 2018, the Presidents Club hosted an annual fundraising dinner for wealthy businessmen, raising around £20 million for children’s charities and other causes.
In January 2018, the Financial Times published an investigation by journalist Madison Marriage, who worked as an undercover hostess at the event. It alleged sexual harassment, inappropriate touching and degrading treatment of female hostesses.
Within 24 hours, the Presidents Club announced it was winding down the charity. Several beneficiary charities returned or declined donations, while the Charity Commission reminded trustees that decisions to accept or return gifts must balance reputational risk with their duty to act in the charity’s best interests.
The Presidents Club controversy showed that due diligence doesn’t stop with the donor. Charities also need to understand how money is raised and whether accepting it could damage public confidence.
The Captain Tom Foundation
In April 2020, Captain Sir Tom Moore took to his garden, raising almost £39 million for NHS Charities Together by walking 100 laps before his 100th birthday. Following his fundraising success, the Captain Tom Foundation was established to continue his charitable legacy.
In 2022, the Charity Commission opened a statutory inquiry into the foundation when concerns were raised about governance and financial management. The investigation examined conflicts of interest, payments to companies connected to Captain Tom’s family and whether trustees had acted independently.
In 2024, the Commission concluded there had been repeated instances of misconduct and mismanagement. It found trustees had failed to act in the charity’s best interests, damaging the Foundation’s reputation.
The findings were a reminder that policies on their own don’t protect charities if they’re not followed. Since then, many organisations have strengthened trustee oversight, conflict of interest procedures and governance processes to ensure decisions are properly documented and can be evidenced if they’re ever challenged.
We know that one size doesn’t fit all
What’s right for one charity might not be right for you. That’s why we tailor our due diligence support to your needs, carefully considering the way you work, your mission, vision, values and objectives. We also think about external factors like the impact a gift could have on your brand and image.
Do you have the time and methods to carry out due diligence checks? If not, we can help. Find out about our due diligence research.