Charity gift acceptance policy

The two rule-sets a gift acceptance policy follows

In England and Wales the rule for accepting, refusing and returning a donation is the Charity Commission's guidance Accepting, refusing and returning donations to your charity, first published on 4 March 2024, and it opens with the presumption: “Your starting point should be to accept and keep a donation offered or given to your charity. This is because donations are important to successfully delivering your charity’s purposes.” It continues: “But sometimes you must refuse or return a donation, and in other circumstances you can decide that it is in your charity’s best interests to do this.”

The Commission gives “donation” a broad meaning: “It can be money, land, goods or other property of any kind freely given to your charity”, including money given in response to fundraising, a gift, a legacy and a grant. A grant is a donation only if it was freely given; if it is really a contract for services, different legal rules apply, and the Commission says to take legal advice before returning grant funding that may be a contract.

The second rule-set is the Fundraising Regulator's Code of Fundraising Practice, whose 2025 edition has applied since 1 November 2025. Rule 2.2 is addressed to the governing body:

• 2.2.1 “You must only refuse or return donations in exceptional circumstances. If you decide to refuse or return a donation you must document your decision appropriately. You must make sure those fundraising on your behalf are aware that decisions relating to refusing or returning a donation must be made by you or in line with a policy you have set.”
• 2.2.2 “You must carry out appropriate due diligence, proportionate to the size and nature of the donation, on the potential donor before accepting a donation.”
• 2.2.3 “You must only refund a donation in line with your charitable institution’s policies or in exceptional circumstances. However, you must refund a donation if a donor correctly exercises their right to a refund.” Before refunding, the charity must make sure it has the power to do so.

The two fit together but are not the same thing. The Commission's guidance states the law on trustees' powers and duties; the Code is self-regulation, and its “must” is a standard the Fundraising Regulator holds charities to, not a statute. The Commission's fundraising guidance, Charity fundraising: a guide to trustee duties (CC20), updated on 3 February 2026, tells trustees: “You should also register with the Fundraising Regulator and follow the Code of Fundraising Practice.” “Exceptional circumstances” is therefore the Code's phrase; the legal test, set out below, is a power plus the charity's best interests.

This guide covers charities in England and Wales. The Code also applies to fundraising in Scotland, but, as its guidance on using the code says, “complaints about Scottish-registered charities operating in Scotland are dealt with by the Scottish Fundraising Adjudication Panel”; charity law in Scotland is OSCR's (section 08). Alongside rule 2.2, the Code lists the Chartered Institute of Fundraising's sector advice, Creating a donations acceptance and refusal policy.

Donations a charity must refuse or return

Some decisions are not the trustees' to weigh. The Commission's guidance says: “You must refuse a donation that comes from an illegal source or with an illegal condition”, for example money from terrorist or other criminal activity. It also says the charity has “a legal obligation to refuse or return a donation” that:

• is from a donor who does not have the mental ability to decide to donate, sometimes called lack of capacity;
• cannot legally be given to the charity, for example where the donor does not own the property they are donating;
• under the terms of the donation, must be returned in certain circumstances, for example a grant agreement requiring unused funds to be returned by a set date.

Suspected criminal money is the exception to returning. The Commission is explicit: “If you suspect that your charity has received a donation from an illegal source, you should not return it or contact the donor. You must follow the law and this guidance, and you may need to take advice about your next steps.” A policy that tells staff to “send it back” whenever a gift looks wrong gets this case backwards. The charity fraud policy guide covers reporting suspected crime.

Donors who cannot make an informed decision. The Code's rule 5.2.3, in its section on fundraising involving people in vulnerable circumstances, requires “not accepting a donation if you know, or have reason to believe, that a person cannot make an informed decision to donate; and returning a donation if you discover that the donor could not make an informed decision at the time of the donation.” The same rule says fundraisers are “not expected to assess every existing or potential donor’s capacity”: the duty bites on what the charity knows or has reason to believe.

The Commission then lists donations a charity is “likely to need to refuse or return”, where the donation:

• is for purposes that fall outside the charity's purposes;
• would result in a valid legal claim, or risk of one, against the charity;
• “has features or conditions that may undermine your charity’s independence. For example, the donation comes with a condition that would require trustees to agree key decisions with the donor”;
• would bring unacceptable burdens that outweigh its benefit, such as “a gift of land with an unaffordable mortgage, or property that is too expensive to insure”;
• may involve unacceptable private benefit, such as a donor of property wanting to keep rights to use it privately that are too significant.

Here the guidance points to a middle course before refusal: “In most of these cases you could consider whether it is possible to work with the donor to change the terms of the donation so that you can accept or keep it”, for example to keep more flexibility in how it is used, align it with the charity's purposes, or keep any private benefit no more than incidental, necessary and reasonable in amount. And if the charity accepts a donation with legal conditions or restrictions, “you must follow them, and be able to show that you have done this.”

Refusing or returning by choice: the power and the test

Outside those categories, a refusal or return is a trustee decision with two conditions: “You must have a legal power to refuse or return a donation and be satisfied that using the power is in the best interests of your charity.”

The power to refuse. “Charities usually have a general power under the law to refuse a donation. But, in all cases, you must check and follow your charity’s governing document.” The governing document may include a specific power to refuse, or provisions that mean the charity cannot refuse; it may be possible to change it, sometimes with Commission authority.

The power to return. Returning needs a power too: “Your charity’s governing document will usually include provisions that allow you to return a donation, but you must check this before deciding to do so.” The usual sources are a general power or a power to dispose of the charity's property. Where there is no appropriate power, or the trustees are unsure, the Commission says they should change the governing document. Extra rules apply to returning land, special trust or permanent endowment property, a return made as part of a compromise of a legal claim, and money received under a grant agreement whose terms allow or require return.

The test. The power can be used only in line with the trustees' duties and the decision-making principles: act within powers, in good faith and only in the charity's best interests; be sufficiently informed; take account of relevant factors and ignore irrelevant ones; manage conflicts of interest; and reach a decision within the range a reasonable trustee body could make. “There may be no right or wrong answer, but your decision must be rational and reasonable, and supported by clear evidence.” The Commission's example factors are the ones a policy should name:

• the value of the donation and the financial loss from refusing or returning it;
• the short and long-term impact on the charity's ability to further its purposes;
• any conflict between the donation and the charity's purposes – “a cancer research charity may decide not to accept donations from donors that mainly produce or sell tobacco”;
• the risks of refusing (to services, beneficiaries and future giving) and of accepting (to support and reputation);
• donors' and stakeholders' views, where it is proportionate to seek them, with those consulted clear that the trustees decide;
• whether criticism is likely to be short-lived or longer lasting, and whether the risks can be managed while keeping the gift;
• the cost of donor conditions, such as naming rights out of proportion to the gift;
• “any policy or guiding principles that your charity uses to support individual decisions”.

The Commission says a decision to return a gift can be even more significant than a refusal, because the money may already be spent or budgeted. The Commission adds three considerations: “the length of time that has passed since the donation was given; the impact of the return on your charity’s funds, activities, commitments, plans, budgets, and reporting; if your charity can afford to return the donation”. While the trustees gather evidence, it may be possible to ringfence the gift from general funds, balancing that against the risks of holding it. A gift held on special trust – the Commission's example is a donation to an animal rescue charity for work with cats only – is judged against the narrower purposes of that trust. How to weigh reputation itself is covered in the reputational risk guide.

Commission authority. Trustees must obtain it if they have decided a refusal or return is in the charity's best interests but have no power to make it and cannot change the governing document to include one; if the decision involves benefit to a trustee or a person or organisation connected to a trustee, where authority is required; and if there is a conflict of interest in the decision that they cannot manage. The conflict of interest policy guide covers declaring and managing conflicts.

Moral (ex gratia) returns and failed appeals follow separate rules. Returning a gift where the trustees could reasonably be regarded as being under a moral obligation to do so, but have no legal obligation, no legal power and no best-interests case, is a moral or ex gratia payment. Since 27 November 2025, when section 331A of the Charities Act 2011, inserted by the Charities Act 2022, took effect, the Commission's CC7 guidance on ex gratia payments says charities have a legal power to make one without Commission authority “if they aren’t restricted from doing so by their governing document; if it falls within set payment limits (explained below) and if the legal tests set out above are met”. The limits depend on the charity's gross income in its last financial year: £1,000 for income up to £25,000; £2,500 up to £250,000; £10,000 up to £1 million; and £20,000 over £1 million. Above those limits Commission authority is still needed, under section 106. Donations to an appeal for a specific purpose that has failed – raised too much, too little, or can no longer be used for that purpose – have their own procedure, sometimes also needing Commission authority.

What a gift acceptance policy should contain

The Commission says a policy can help trustees “make sure that your decision-making is consistent across your charity, and in line with your trustee duties” and “set out for trustees and staff who should be involved in decision-making”, and that they should “review any policy at regular intervals”. Read with the Code, that gives the policy four jobs: make accepting donations the default and say which gifts are welcome, say what checks come before a gift is accepted, say who decides when there is doubt, and say how the decision is recorded.

Due diligence in proportion. Code rule 2.2.2 sets the standard: checks “proportionate to the size and nature of the donation” before accepting it. A policy usually sets tiers by value and by risk – a regular small gift by direct debit needs no more than ordinary fraud controls, a first large gift from an unknown source needs the donor identified and the source of the money understood, and a gift with conditions or from a company or overseas needs more. These checks sit beside the charity's existing fraud and anti-money laundering controls rather than replacing them. The Commission's guidance How to report a serious incident in your charity (updated 16 January 2026) asks charities to “be alert to unusual donor activity, such as a large, one-off donation or a series of smaller donations from an unfamiliar, unverified or anonymous source; donations may take forms other than money, for example shares or goods.”

Red flags and escalation. CC20 asks trustees to make sure that “trustees, staff and volunteers know to look out for suspicious donations such as a large, unexpected or anonymous donation or donations with unusual conditions attached” and that “they report these to the right people at your charity (trustees or senior staff)”. The policy names those people. Delegation is allowed – the Commission mentions staff or a trustee sub-committee – “But the overall responsibility remains yours.”

Anonymous gifts. “Some donors want to remain anonymous, and your charity can accept anonymous donations. However, you should look out for any suspicious circumstances and put adequate safeguards in place.” A charity operating abroad should check whether accepting anonymous donations complies with local law or tax rules there.

Gift Aid and tainted donations. The tax rules on tainted donations (Chapter 8 of Part 13 of the Income Tax Act 2007, with the definition in section 809ZJ) remove income tax reliefs, and the equivalent capital gains and corporation tax reliefs, from a donation linked to arrangements that benefit the donor. They changed under section 56 of and Schedule 9 to the Finance Act 2026, for donations made on or after 6 April 2026. A donation is now tainted where, among other conditions, the donor or a person connected with them enters into arrangements, it is reasonable to assume that the donation and the arrangements would not have been made independently of one another, and “a linked person who is not a charity receives financial assistance” under those arrangements from the charity or a connected charity; “financial assistance” includes “a loan, a guarantee, an indemnity or any form of investment (in each case, whether or not on arm’s length terms)”. Some assistance is ignored, including arm's-length payments by the charity for work done for it and the expenses of that work (section 809ZL). The old test, which asked whether the main purpose, or one of the main purposes, of the linked person in entering into the arrangements was to obtain a financial advantage from the charity, has gone, replaced by an outcome test, so a policy written before April 2026 that relies on “no main purpose of benefit” needs updating. A gift that arrives alongside a loan, an investment or a guarantee involving the donor is the case to escalate.

Refunds. Under Code 2.2.3 the policy itself decides when a refund is made, outside exceptional circumstances and refunds a donor is entitled to. Say who can authorise one, and that the power to refund is checked first.

The headings below are a template for the structure, not wording to adopt unchanged; the content of each comes from the charity's own purposes, size and risks.

Reporting to the Commission, and the record of each decision

Two figures recur in the Commission's guidance, and neither is a legal threshold. The donations guidance says: “You should report a serious incident to the Commission if you receive an anonymous donation of £25,000 or more.” The serious incident guidance adds: “As a guide, trustees should report unverified or suspicious donations totalling £25,000 or more, providing the assurance outlined above that appropriate checks have been made before accepting/declining the donation.” Below £25,000 the trustees use their judgement. Even so, a charity with income over £25,000 must declare in its annual return that no serious incident that should have been reported went unreported, and the Commission notes that giving it false or misleading information, including through the annual return, is an offence under section 60 of the Charities Act 2011. The same guidance warns that charities should “act with due diligence and be mindful of donations to your charity from sources that cannot be verified, or you may be in breach of your duties under the Finance Act 2011.” And when a charity does refuse or return a gift, the donations guidance says: “Consider whether you need to report a serious incident to the Commission if you decide to refuse or return a donation.” The serious incident reporting guide covers how and when to report.

Returning money also has an accounting and tax side: the Commission says a charity deciding to return funds may need specialist advice on how to show the return in its accounts and on “any gift aid or other tax implications”. The financial controls guide covers how gifts are received and banked.

The record is where both rule-sets meet. The Commission: “You should keep a record of your decisions and how you reached them.” The Code: “If you decide to refuse or return a donation you must document your decision appropriately.” And the Commission sets out what it would look for if it examined a decision: it “may look into your decision if you cannot show that you have: acted within your powers; complied with your trustee duties and your governing document; considered and balanced relevant factors, and ignored irrelevant factors; reached a reasonable decision in the best interests of your charity.” A record that answers those four points shows:

• the donation, the donor as far as known, and any conditions attached;
• the checks carried out and what they found;
• the power relied on, and whether Commission authority was needed;
• the factors weighed on each side, the views sought, and any conflicts declared and how they were managed;
• the decision, who made it and under what delegated authority, and how it was put into effect;
• whether a serious incident report or any other report was considered, and why it was or was not made.

A minute reading “the board agreed to decline the gift” records the outcome. It does not show any of the points above, and those are what the Commission asks trustees to be able to show.

The decision is usually reached by message first

Few gift decisions start in a board meeting. A legacy officer learns that a large bequest includes a flat with a sitting tenant. A company offers a six-figure gift on condition that its name goes on the new building. The head of fundraising messages the chief executive on a Saturday: the donor's name has come up in a news story. The chief executive forwards it to the chair. Between them, over two evenings, they discuss what checks to run, whether the gift is still welcome, whether to hold it apart while they find out more, and whether it needs to come to the full board. By the time a paper is written, most of the reasoning has already happened.

That thread is the evidence the Commission and the Code ask for: who raised the concern, what was checked, which factors were weighed, who decided and when. If it sits on three personal phones, the charity can produce the minute but not the reasoning, and when the head of fundraising moves on, the account of why a gift was refused or kept goes with them.

ComplyChat is designed to keep those conversations on the charity's record. Trustees, staff and volunteers talk in a channel the charity holds; everyone added is told it is on the record and can object or leave; and a mobile number verified by SMS is an identity, so a trustee or volunteer with no work account can take part. On paid plans, once the charity's Microsoft 365 tenant is connected, conversations are kept within the charity's own Microsoft 365 subscription under the retention schedules it already runs. ComplyChat is not a donor database or a due diligence service, it does not decide whether to take a gift, and it does not replace the trustees' minute of the decision.

A question for the next trustees' meeting: for the last gift your charity declined, returned or accepted after a hesitation, could you show the Commission how the decision was reached, and who reached it?

Questions people ask

What is a gift acceptance policy?

A gift acceptance policy, also called a donation acceptance policy or an acceptance and refusal policy, sets out how a charity decides whether to accept, refuse or return a donation, the checks it carries out first and who makes the decision. The Charity Commission says a policy can help “make sure that your decision-making is consistent across your charity” and “set out for trustees and staff who should be involved in decision-making”.

Does a charity have to have a gift acceptance policy?

Not by law: the Charity Commission says trustees “may want to consider setting a policy”. The Code of Fundraising Practice, however, requires the governing body to make sure fundraisers know that refusal or return decisions “must be made by you or in line with a policy you have set”, so a charity without a policy needs every such decision to come to the trustees.

Can a charity refuse a donation?

Yes, if the trustees have the power and refusing is in the charity's best interests. The Charity Commission's starting point is to accept, but it says charities “usually have a general power under the law to refuse a donation”, that the governing document must be checked first, and that the decision “must be rational and reasonable, and supported by clear evidence”. The Code of Fundraising Practice adds that refusals and returns must be exceptional and the decision documented.

When must a charity refuse or return a donation?

The Charity Commission says a charity must refuse a donation from an illegal source or with an illegal condition, and must refuse or return one from a donor who lacks the mental capacity to decide, one that cannot legally be given (such as property the donor does not own), or one whose terms require its return. If a donation is suspected to come from an illegal source, the Commission says not to return it or contact the donor, and to take advice.

Should a charity report an anonymous donation?

Charities can accept anonymous donations, but the Charity Commission says “You should report a serious incident to the Commission if you receive an anonymous donation of £25,000 or more”. Its serious incident guidance also asks trustees, as a guide, to report unverified or suspicious donations totalling £25,000 or more. Neither figure is a legal threshold; below it the trustees use their judgement, though a charity with income over £25,000 must confirm in its annual return that no reportable serious incident went unreported.

Official guidance and your next step

Start with the Charity Commission's Accepting, refusing and returning donations to your charity and rule 2.2 of the Fundraising Regulator's Code of Fundraising Practice, with rule 5.2 on people in vulnerable circumstances. For suspicious and anonymous gifts, read CC20 and How to report a serious incident in your charity; for moral returns, CC7; for tax, section 809ZJ of the Income Tax Act 2007 as amended by section 56 of the Finance Act 2026. Quotations are from those pages as published on 28 October 2026.

This guide covers charities in England and Wales and is not legal or tax advice. Charities in Scotland are regulated by OSCR, and in Northern Ireland by the Charity Commission for Northern Ireland; check their current guidance directly. The guide to the policies a charity needs sets this one among the rest.

Then do one thing: find the last gift your charity hesitated over and check the record against the Commission's four points – powers, duties, factors, a reasonable decision. If any is missing, that is the first gap your policy should close.