The head of England’s charity regulator has promised to crack down on “squeamish” charity boards who reject large cash donations from corporations or wealthy philanthropists on moral grounds.
Orlando Fraser, the chair of the Charity Commission, said the regulator may intervene where trustees have rejected or returned donations simply because their “personal worldviews or preferences” were incompatible with those of the donor.
Fraser said charities should not refuse or return donations “without very good reason”, adding that they would have to have “significant” justification for turning down money that could be spent providing services for beneficiaries.
He did not give examples of charities that had taken what he called “materially irrational” decisions to reject donations, nor did he provide any evidence refusing or returning donations had become more prevalent among charities.
High-profile examples of charities refusing donations include Save the Children’s rejection of a £750,000 gift from a North Sea gas company in 2022. And in 2018 the Great Ormond Street hospital charity said it would return £530,000 to the Presidents Club after a sexism and harassment scandal, but later reversed the decision.
Several arts and museum charities have attracted criticism from rightwingers after they stepped away from sponsorship deals with fossil fuel corporations, including the Tate, National Portrait Gallery, Royal Shakespeare Company, Scottish Ballet and the Royal Opera House.
Charities have become more sensitive in recent years to attempts by corporations and wealthy individuals to “wash” their reputation via philanthropy, such as the Sackler family, which made its fortune from the legal sale of highly addictive opioids in the US and gave millions in arts donations.
In a speech on Thursday night, Fraser said: “One example of materially irrational decision-making would be when it is apparent that the motivations for a return or refusal are simply the personal worldviews or preferences of the relevant trustees, rather than the best interests of the charity.”
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.”
Fraser, who elsewhere in the speech accused wealthy British citizens of “not pulling their weight” when it came to charitable giving, offered no evidence that wealthy individuals were put off donating because of the fear their money may be rejected.
One charity law expert called the speech a “bizarre invention of fairyland problems” at a time when the vast majority of charities were struggling because of the cost of living crisis and funding cuts.
They told the Guardian: “Is he saying that a charity should accept funds from a sexist, racist or misogynistic donor? Charities may run the risk of their supporters kicking off if they did. And charities will get into trouble if they don’t do due diligence on a donor.”
Fraser said the commission was working on updating existing guidance on accepting or refusing charitable donations. The law says charities can refuse unlawful donations – for example where the money comes from the proceeds of crime – and can return legal gifts if keeping them was likely to cause them reputational damage.
Larger charities draw up donation policies. For example, Save the Children has a “no go” rule regarding donations from individuals or corporations whose wealth is built on activities that are harmful to children, such as pornography, tobacco, arms manufacturing and carbon intensive fossil fuels.
• This article was amended on 10 November 2023. An earlier version said that “Great Ormond Street hospital [returned] £280,000 to the Presidents Club”. The sum of the donations that the charity said it would return was £530,000, but the decision was later reversed.
