When should a charity refuse a donation? Should a charity ever refuse one? These are questions which have been asked time and again, and yet there still isn’t any real consensus on the answer.
The Institute of Fundraising’s updated guidance on the acceptance and refusal of donations states that aside from donations which would be unlawful to accept, “donations to charities can, and should, only be refused in exceptional circumstances”. It also repeatedly says decisions should be made on a case-by-case basis by the charity recipient, taking into account both the potential benefit of the donation and the possible negatives.
Importantly, it is clear on the fact that an organisation’s ethics and values “cannot be the decisive factors”. This provides some clarity, and it makes sense for each organisation to make its own call in any given situation, but it’s not exactly clear cut.
When looking at real-life instances, it’s fair to say some of the stances taken by organisations turning down income are more easily understood and defended than others, such as the recent case of two private schools turning down a £1 million scholarship donation intended exclusively for poor white boys. Their argument – that the stipulations attached to the donation amounted to discrimination – is not only sound, but also prudent as in all likelihood accepting and using the funds on those grounds would break equality laws.
But some are less clear. In 2018 one charity refused money raised by community fundraisers, because in the course of their efforts they ‘blacked up’ in offensive outfits. In this case (and this day and age), there’s little defence for the choices of the fundraisers. But their bad choices don’t make the money they raised any less valid – or valuable. The same could be said for the funds raised by The Presidents Club following the Financial Times investigation which revealed sexual harassment of female hostesses and controversial auction prizes. In that case the charities again turned down the funds, with Great Ormond Street Hospital going so far as to return previous donations, too.
The problem isn’t only limited to individual giving or community fundraising, either. In early 2019 research was released outlining how charitable assets had grown more than charitable spending over the previous five years, with charity income from investments having hit a 10-year high in 2018. So far, all good news for the sector.
That is, until you start to look deeper into where their money is invested. Yes, it’s true that charities have started to take more responsibility for ensuring their funds are invested ethically, but that certainly wasn’t always the case. The fact that there is a discussion about this only serves to reiterate the point that where a charity’s money is from is often considered as of equal importance to where it is spent.
It’s reasonable enough to say that in an ideal world, no charity should ever have to accept donations from sources deemed unsuitable or undesirable. But as the very existence of the charity sector will attest, we do not live in an ideal world.
Not-for-profit organisations are in a constant scrabble for vital funds from a limited pot of money, a situation which is even more true outside of the big household name charities which account for the overwhelming majority of the sector’s overall income.
Public relations vs public benefit
So how can a charity – especially those with modest resources – navigate these difficult situations should they encounter them? If your organisation ever finds itself in a dilemma of this nature, one of the key points to consider is the potential damage accepting a donation could cause for your organisation in terms of its brand and public opinion. But how do you quantify this?
Should you decide to turn down the donation, some of your supporters might think you don’t really need the money, so begin to question their own support and reduce their level of giving.
However, if you do accept it and fall foul of the press or public sentiment, you may start to see donors cancel or withhold their donations. While either of these outcomes would be a clear indication of the knock-on effect of your decision – it’s one only truly made clear in hindsight. So, the question then becomes: how can you predict it?
This second question becomes even more complex once you begin to factor in the positive effect the donation could have in terms of favourable public relations as a result of your charitable impact. If you use the money well, might the public pay more attention to your good deeds than the source of the money that funded them?
The simple reality is it’s a gamble either way. Depending on the situation you’ll likely have some idea as to how it could pan out, but that doesn’t mean it’s a wholly reliable basis for a decision.
However, one thing a charity should unquestionably have more of a handle on is their charitable impact. An organisation should know how much public benefit could be achieved with any given amount of money as part of their responsibility to be accountable – and that’s all it needs to know. It might be different for major and super-major charities, for which their brand value is paramount.
But for smaller organisations, focusing on core charitable purposes is the key to simplifying the decision-making process. Fundamentally, a charitable organisation should always value its impact over public relations.
It’s also worth remembering it’s impossible to please everyone all the time. So why worry unduly about all the potential repercussions? Accept the possibility that some donors and supporters might be ‘turned off’ and focus on the core charitable work that makes your organisation really matter.
Worst case scenario, you can always hire a PR firm or consultant to ride out the storm and make sure your supporters and the general public hear about the good work you do. But ultimately, a charity should live or die by its impact, and it’s from this alone that genuine legacies are built. So, be bold, be brave, take the money and make the very best of it you can.
Rich James is a freelance fundraiser and public relations consultant at twofirst. He works with words to realise the potential in smaller organisations to achieve great things.