In a recent address by the Chair of the Charity Commission, Orlando Fraser KC, to the Beacon Philanthropy Forum, he set out how the Charity Commission intends to support and encourage more philanthropic giving when they ‘are obviously limited in how [they] can help, as [their] role gives [them] no influence over fiscal incentives to giving, nor do [they] pull any other Government levers that might nudge the rich to give more’.
The early part of the speech of Mr Fraser KC was aimed at encouraging a shift in the way the media and the public approach overt acts of philanthropy by high-net-worth individuals, in respect of which he said:
“I do believe that, over recent years, there has been an unhelpful tendency to malign philanthropy and philanthropists. We have a culture in which people are scrutinised because they are giving, and giving publicly. We have seen scrutiny that supposes giving must be motivated by cynicism, by an attempt to ‘whitewash’ a bad reputation, or to obscure nefarious deeds, or to increase an individual’s power.
This feels misguided.”
He actively praised the Sainsbury family, Julia and Hans Rausing, and Andrew Law and his family for the multimillion pound donations they have given and the work that they have done with charities.
Mr Fraser has concluded that the Charity Commission can assist in a number of ways in encouraging philanthropic giving. He set out what to expect of the Charity Commission in the coming period as follows:
“First, and always foremost, we shall continue to enforce charity law robustly where appropriate, as it is only in that way that many donors can have confidence to give widely to the sector.
We have robust registration processes to protect the integrity of charity, and we intervene in registered charities where there is abuse of charities.
We also are vigilant to ensure that the charitable sector is not infected by illegal funds, as they undermine charity. Although the UK’s National Risk Assessment tells us that the risk of such abuse is low, we use our enforcement powers actively to prevent this, as we repeatedly have in relation to those subject to sanctions following Russia’s invasion of Ukraine.
Second, we have our public pulpit, which I am using today, to signal the importance of the promotion of philanthropy in society to help fight this economic crisis.
Third, as part of our duty to provide legal guidance on charity law, I can confirm that next year we will publish updated guidance on returning and refusing donations. Its direction of travel will be a promotion of lawful philanthropy, and ought to further empower trustees to use their discretion in making the right decision for their charity, starting from the principle that charities must have funds in order to deliver on their purposes.
Charity trustees should of course think carefully about the donations they receive, especially large ones. Plainly they cannot accept any donation where it would be illegal for them to do so (including under sanctions rules), and they must be led always by their charity’s purposes. They must always be mindful of their reputations. So even if not illegal, if a donation would seriously put at risk the charity’s reputation, or other sources of finding or support, trustees may justifiably decide to decline.
But the starting principle must be that charities need funds to do their good work.
Commentators are, of course, free to express misgivings about the personal background of those who give, and the mores of trustees who accept their money. But those misgivings do not automatically translate into a regulatory concern on the Commission’s part, unless unlawfulness or serious risk is involved.
I should add in this context that I said when I became Chair that I would defend charities where I thought they were coming under unfair or undue attack, whether from the media, or politicians or any other quarter.
I can assure you that, given its obvious importance to the disadvantaged in society, I will very much do this in the context of philanthropic giving, where otherwise lawful and reasonable.
Fourth, we will continue to promote the adoption by charities of impact reporting, as part of our objective of enhancing the accountability of charities to donors. Charities should consider how to better formulate and communicate impact measurements in a way that fosters trust. I’d encourage charities to speak in the language of ‘bang for buck’ in the interests of further nurturing relationships with those with deeper pockets.
Fifth, and finally for now, we have persuaded the DCMS that we need an experienced philanthropist on our Board. I was pleased to be able to include this in current Board recruitment process, which closed recently – and I am sure there will be some excellent candidates.”
Shortly after delivering this speech, the Charity Commission started a consultation in respect of new guidance it intends to publish on the use of social media by charities. This is clearly a relevant subject to philanthropy, given Mr Fraser KC’s comments about the approach of the media and the public to overt philanthropic giving. The Charity Commission has confirmed:
“The new resource is designed to help trustees understand their responsibilities and manage the risks; it encourages them to adopt a social media policy for their charity and outlines what can be included in the policy.
It also aims to help trustees understand what to do if issues occur, for example if problematic content is posted either by the charity or by someone connected to the charity.”
In respect of the issue of problematic content, Nelsons regularly advises charities on the approach that should be taken to defamatory comments made about the charity online and/or on social media. For more information on how Nelsons can assist, please see here.
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Kevin Modiri is a Partner in our expert Dispute Resolution team.
If you have any questions concerning the subjects discussed in this article, please do not hesitate to contact Kevin or another member of the team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online enquiry form.
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