Charities must not reject donations over “personal views” or “external pressures” if it is not in the organisation’s best interest, regulators warn in new guidance.

The Charity Commission said it may intervene if trustees turn away donations without evidence of “sound judgment”, and new guidance released on Monday states they should, by default, accept donations.

Save The Children refused a £750,000 donation from North Sea gas provider Neptune Energy in March 2022, after deciding it would no longer accept gifts from fossil fuel companies, the Independent reported.

Chairman of the Charity Commission, Orlando Fraser KC, announced the guidance on turning down gifts was under development during a speech at the University of Kent last November.

He said the top 1% of earners in the UK are “not pulling their charitable weight” because they “give less than their counterparts in comparable, equivalent societies, such as New Zealand and Canada”, and feared philanthropy was on a “downward trend”.

He added: “Demonstrative personal squeamishness around sources of philanthropic funding may benefit the sense of righteous progressiveness of a trustee or charity executive, but it will most likely not serve the beneficiary reliant on the services a charity provides.

“Such attitudes harm not just the beneficiaries of the individual charity, but risk undermining charitable giving by high-net-worth individuals overall.

“If you care about the distribution of wealth, encourage those with wealth to distribute it a little more vigorously.

“So our upcoming guidance will compel trustees to think more carefully about returning or refusing donations”.

Charity funds
Pound coins (Dominic Lipinski/PA)

The guidance states trustees should consider how likely the gift is to damage its finances, ability to deliver services, or to attract donations in the future, and how serious any affects may be.

They must also assess whether the money will harm the charity’s reputation, particularly among supporters or beneficiaries, and how any related decisions align with the organisation’s purposes, it said.

Steps to mitigate risk may be possible, it added, such as by negotiating conditional terms or creating a public explanation for accepting the money.

In a statement on Monday’s announcement, Mr Fraser said: “When charities are offered a donation, the law is clear that their starting point should be to accept unless there is very good reason not to.

“I hope this guidance will empower trustees to feel able to make the choice that’s right for them when faced with a tough decision.

“It has been designed to offer clarity and support as they navigate what can be tricky territory.

“As a proportionate regulator, we will not generally get involved though may do so if trustees cannot evidence sound judgment and a considered process for their decision.

“Our new strategy commits to playing our part in securing greater philanthropic giving across England and Wales, and the clarity this guidance delivers is an important early contribution to that mission”.

Charities must reject some donations by law, including if they come from an illegal source such as terrorist or criminal activities.