Donation refusal policy

The Trustees take overall responsibility for decisions relating to whether a donation is accepted or refused.

The Trustees must be able to demonstrate that they have acted in the best interest of PET in each and every case.

The Trustees have a duty to consider carefully, on the basis of the evidence made available to them, whether PET’s interests will be better served by accepting or refusing the donation and to act accordingly. The Trustees are aware that donations to charities should only be rejected in exceptional circumstances, when:

• It would be unlawful to accept it (e.g. the organisation knows that the gift comprises the proceeds of crime); or
• Accepting the donation would be detrimental to the achievement of the purposes of the organisation, as set out in its constitution. This anticipated detriment must be set against the benefit of having the funds from the donor, which would enable the organisation to pursue its purposes.

Trustees must not allow individual or collective personal, political or ethical issues, which are not directly related to the interests of PET, to affect their judgment. Although ethics and values will be important in reaching the decision, these cannot be the decisive factors. The organisation needs to be able to demonstrate that acceptance of the donation would be detrimental to the achievement of its purposes. For example, it may be evident that the acceptance of a donation would most likely lead to reputational damage and:

• The loss of donations from other supporters or funders at least equivalent, over the long term, to the value of the donation
• The loss of volunteers whose services would be at least of as great value as the donation
• The loss of staff or inability to recruit staff.

On a day-to-day basis, PET’s Board of Trustees delegates the responsibility to accept or refuse donations to the Chief Executive, assisted by the Senior Management Team (SMT). They apply the “Know your donor” principle (from Charity Commission guidelines Chapter 2: Due diligence, monitoring and verifying the end use of charitable funds), which requires the following due diligence steps when accepting donations:

• identify – know who we are dealing with;
• verify – where reasonable and the risks are high (e.g. due to the high value of a donation), we will verify donor identities;
• know what the organisation’s or individual’s business is and can be assured this is appropriate for the charity to be involved with;
• know what their specific business is with our charity; and
• ‘watch out’ for unusual or suspicious activities, conduct or requests

These steps will be applied to all donations of £5,000 or above, though they may also be applied to smaller donations if for any reason this appears appropriate. In the case of grant making trusts, they may also be applied pre-application rather than at the point of receipt.

The process for escalating concerns relating to potentially unacceptable donations is as follows:

• The Head of Fundraising and External Affairs is responsible for ensuring that any potential donor is supporting PET in accordance with this policy. If any element of the policy is contravened the Head of Fundraising and External Affairs will raise concerns with the Chief Executive regarding the acceptance or refusal of a suggested donation.
• Should there be continuing doubt about the acceptability of the donation, the Chief Executive will ensure that these concerns are taken to the Board of Trustees with a recommendation as to whether a donation should be refused.
• The Chief Executive, assisted by the Head of Fundraising and External Affairs, will present the case to the Board, including any evidence gathered, in order for the Trustees to make a decision regarding acceptance or refusal.
• This decision, and the reasons for it, will be carefully noted in the Board minutes, and refused donors will be informed of the Board’s decision not to accept a donation, and the reasons for that decision.
• In complex or difficult cases, the Trustees may apply to the Charity Commission for an order authorising the PET to refuse a donation*.

It should be noted that any anonymous donation of £25,000 or more where due diligence has not identified the donor will be reported to the Charity Commission in line with the Commission’s recommended good practice in How to report a serious incident in your charity.

*Circumstances where such an order might be of particular benefit are those where:

• • it is not immediately clear what the ‘best interests of the charity’ are in relation to the proposed donation
  • large sums of money or property are involved
  • the trustees have reason to believe that a decision taken by them might be subsequently challenged in the courts
  • the trustees wish to use the ‘authority’ of a Charity Commission order to mitigate against the threat of negative publicity engendered by the refusal of a donation.

A suggested donation must be clearly evaluated in order to establish whether it would be in the best interest of PET to accept or refuse it. The donation will be evaluated against these factors:

The donation will be evaluated against these factors:

• The donation should contribute towards PET’s overall strategy and plans.
• PET should be able to successfully deliver the agreed activity and advance its mission under the conditions tied to the donation, such as schedule and channelling of payment(s), required co-funding if any, reporting requirements and other legal aspects of the contract/grant/agreement.
• The donor’s objectives, activities and values must not appear to be incompatible with the PET’s vision, mission and values, particularly if this risks causing significant damage to PET’s integrity, public image or professional reputation.
• The donor’s objectives, activities or values should not be in conflict with PET’s Equality, Diversity and Inclusion Policy.
• PET will not accept donations from organisations or individuals whose wealth is known to result from illegal activities or where there is evidence of corruption or other economic crime.

PET will refuse donations in the following circumstances:

• Where the activities of a donor are directly contrary to the objectives or agreed policies of PET in such a way as to cause reputational damage leading to loss of income from other sources and damage to working relationships with partner organisations.
• Where PET suspects that the gift has been donated to facilitate money laundering or other criminal activity.
• Where it can be clearly shown that the cost to PET of accepting a donation will be greater than the value of the donation itself, and that acceptance of the donation will directly lead to a net decline in the assets of the Charity.
• Where the offer of support is dependent upon the fulfilment of certain conditions placed upon PET and any condition:

1. 1. is in itself contrary to the objectives of PET;
   2. is regarded as needing an unreasonable level of support from PET especially in relation to the size or impact the donation will have on PET’s charitable activities;
   3. will divert PET from pursuing its current objectives, policies or work priorities as a necessary result of the fulfilment of the conditions alone;
   4. poses a reputational risk to PET.

• Where a donor or potential donor is considered vulnerable (see PET’s Policy for fundraising communications with vulnerable supporters).

The Trustees (and their delegates) will take great care and consideration in deciding whether to accept or refuse a donation:

• Where an offer of support is dependent upon PET first spending its own money or resources in order to facilitate the conditions of the donation, as this might place PET’s assets under undue and inappropriate risk. Donations should preferably be given in full up-front or alternatively in instalments linked to an agreed contract and work plan.
• Where the support, whilst reflecting PET’s objectives, is unsustainable, for example, if PET does not have the resources to maintain the running costs associated with the donation.
• Where the support consists of goods, services or property which PET cannot lawfully use, convert, exchange or sell in direct support of its charitable objectives.

If PET has already accepted a donation, it may only be returned:

• if the terms and conditions of the gift provide for it to be returned in particular circumstances; or
• where the law specifically provides for the gift to be returned in particular circumstances; or
• by way of an ‘ex-gratia payment’ (a payment made as a result of a compelling moral, but not legal, obligation). This type of donation return will only be permitted where the charity has received an order from the Charity Commission for England and Wales.