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14 Jun 2021 News

As a trustee, how should you deal with potentially tainted donations?

Guest Article from Tom Murray from Charityflow

In 2019 the National Portrait Gallery severed its links with the controversial Sackler Trust foregoing a £1 million donation. Later that year the gallery also came under pressure to sever its links with BP who had sponsored its annual portrait competition for 30 years and The National Gallery of Scotland has since announced that they will not show the exhibition.

This year an uncomfortable light has been shone on historic links on the fortunes made during the slave trade 2 centuries ago which still endow some of our greatest institutions. Funding for charities is coming under increasing scrutiny when its source is somehow considered to be tainted by the way in which it was first made.

At the same time public funding has come under huge pressure. International development budgets have already been slashed and funding for sectors such as the arts will not be at the top of the priority list. Last year the Culture Secretary warned museums that they risked their public funding if they refused to display artefacts or pull down statues because of public pressure. Charities mustn’t engage in virtue signalling.

Refusing donations because they are at variance with a charity’s values (rather than its purposes) gets into difficult territory, especially when there is nothing illegal about how the money has been made. The Trustees must act in the best interest of the charity and turning away much needed funds, especially if it might risk public funding needs to be totally justifiable.

The message is clear. Charities are going to need to be very careful if they want to be able to both refuse certain sources of private funding and apply for public funding.

So how should trustees deal with the question of what they consider to be tainted money?

  • If they are going to consider turning away funds, trustees must justify the action with resilient, defensible policies. Donations need to be considered against robust criteria established before an offer is made and not on a case-by-case basis.
  • One justification might be that, by accepting such money, a charity might prevent even larger sums being raised from other sources. Possibly they could argue that it could impact their ability to attract the best talent or dent their visitor numbers.
  • Equally it would be fair for, say a cancer charity to turn down tobacco money or an environment charity to reject fossil fuel money on ethical grounds.

 

William Booth, the founder of the Salvation Army famously said “the trouble with tainted money is taint enough of it.”. You need to have a good reason to disagree with him.

 

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