This policy has been set out by the Trustees of Prisoners’ Education Trust (PET). It is a public guide as to how PET makes decisions on accepting and refusing donations and the procedures it follows.
This policy reflects:
This document makes clear the Trustees’ legal obligations with regard to the acceptance and refusal of donations. It outlines the day-to-day procedures that need to be adhered to and ensures that decisions are not taken on an ad-hoc basis, but are in support of PET’s strategy and objectives.
1. The trustees’ legal obligations with respect to the acceptance or refusal of donations
The Trustees take overall responsibility for decisions relating to whether a donation is accepted or refused. The Trustees are aware that donations to charities must only be refused or rejected in exceptional circumstances (FR Code 2.2.1).
The Trustees have a duty to consider carefully, on the basis of the evidence made available to them, whether PET’s interests will be better served by accepting or refusing the donation and to act accordingly. The Trustees must be able to demonstrate that they have acted in the best interest of PET in each and every case.
In certain circumstances Trustees have a legal obligation to refuse or return a donation, when:
- It comes from an illegal source or with an illegal condition;
- It is from a donor who does not have the mental ability to decide to donate (see PET’s Vulnerable Donor Policy);
- It cannot legally be given to PET; or
- Under the terms of the donation it must be returned in certain circumstances.
Trustees may also refuse or return a donation where this would be in PET’s best interests. The parameters for making this decision are laid out below. Trustees will not allow personal motives, opinions or interests to affect their decision. Any conflicts of interest will be identified and managed in line with PET’s Conflict of Interest policy.
2. Procedures
On a day-to-day basis, PET’s Board of Trustees delegates the responsibility to accept or refuse donations to the Chief Executive, assisted by the Senior Management Team (SMT).
Due diligence on the potential donor must be carried out, proportionate to the size and nature of the donation (FR Code 2.2.2). They apply the “Know your donor” principle (from Charity Commission guidelines Chapter 2: Due diligence, monitoring and verifying the end use of charitable funds), which requires the following due diligence steps when accepting donations:
- Identify: know who we are dealing with;
- Verify: where reasonable and the risks are high (e.g. due to the high value of a donation), we will verify donor identities;
- Know what the organisation’s or individual’s business is and can be assured this is appropriate for the charity to be involved with;
- Know what their specific business is with our charity; and
- “Watch out” for unusual or suspicious activities, conduct or requests
These steps will be applied to all donations of £5,000 or above, though they may also be applied to smaller donations if for any reason this appears appropriate. In the case of grant making trusts, they may also be applied pre-application rather than at the point of receipt.
The process for escalating concerns relating to potentially unacceptable donations is as follows:
- The Head of Fundraising and External Affairs is responsible for ensuring that any potential donor is supporting PET in accordance with this policy. If any element of the policy is contravened the Head of Fundraising and External Affairs will raise concerns with the Chief Executive regarding the acceptance or refusal of a suggested donation.
- Should there be continuing doubt about the acceptability of the donation, the Chief Executive will ensure that these concerns are taken to the Board of Trustees with a recommendation as to whether a donation should be refused. The Chief Executive will inform the Chair of the Fundraising Committee and seek their views in advance of presenting the case to the Board.
- The Chief Executive, assisted by the Head of Fundraising and External Affairs, will present the case to the Board, including any evidence gathered, in order for the Trustees to make a decision regarding acceptance or refusal.
- This decision, and the reasons for it, will be carefully noted in the Board minutes (FR Code 2.21). If relevant, Charity Commission authority will be sought.
- Refused donors will be informed of the Board’s decision not to accept a donation, and the reasons for that decision.
It should be noted that any anonymous donation of £25,000 or more where due diligence has not identified the donor will be reported to the Charity Commission in line with the Commission’s recommended good practice in How to report a serious incident in your charity.
3. Decision making factors and guiding principles
A suggested donation must be clearly evaluated in order to establish whether it would be in the best interests of PET to accept or refuse it. The factors that will be considered are:
- The value of the donation and its potential to help PET’s work.
- The financial loss that will result from refusing or returning the donation.
- The short- and long-term risks and impact of refusing or returning the donation on PET’s ability to deliver our work.
- The short- and long-term risks and impacts of accepting or keeping the donation.
- Any potential conflict between the donation and PET’s purpose, and how likely and serious this is.
- The views of other donors and other stakeholders regarding accepting, refusing or returning the donation.
- Whether any negative criticism or reputational damage resulting from accepting the donation is likely to be short lived or longer lasting.
- The cost and impact of complying with any donor conditions.
- The additional guiding principles laid out below.
Guiding principles
- In line with Charity Commission guidance, PET’s starting point is that donations should be accepted.
- The donor’s objectives, activities and values must not appear to be incompatible with PET’s vision, mission and values, particularly if this risks causing significant damage to PET’s integrity, public image or professional reputation.
- The donor’s objectives, activities or values should not be in conflict with PET’s Equality, Equity, Diversity and Inclusion Policy.
- Our approach to due diligence will be proportionate to the size of the donation.
4. Refusing donations
In addition to the legal circumstances outlined in section 1, and in line with the decision making factors and guiding principles set out in Section 3, PET will refuse donations in the following circumstances:
- Where the activities of a donor are directly contrary to the objectives or agreed policies of PET in such a way as to cause reputational damage leading to loss of income from other sources and damage to working relationships with partner organisations.
- Where it can be clearly shown that the cost to PET of accepting a donation will be greater than the value of the donation itself, and that acceptance of the donation will directly lead to a net decline in the assets of the Charity.
- Where the offer of support is dependent upon the fulfilment of certain conditions placed upon PET and any condition:
- is in itself contrary to the objectives of PET;
- is regarded as needing an unreasonable level of support from PET, especially in relation to the size or impact the donation will have on PET’s charitable activities;
- will divert PET from pursuing its current objectives, policies or work priorities as a necessary result of the fulfilment of the conditions alone; or
- poses a reputational risk to PET.
PET will take great care and consideration in deciding whether to accept or refuse a donation:
- Where an offer of support is dependent upon PET first spending its own money or resources in order to facilitate the conditions of the donation, as this might place PET’s assets under undue and inappropriate risk. Donations should preferably be given in full up-front or alternatively in instalments linked to an agreed contract and work plan.
- Where the support, while reflecting PET’s objectives, is unsustainable, for example if PET does not have the resources to maintain the running costs associated with the donation.
- Where the support consists of goods, services or property which PET cannot lawfully use, convert, exchange or sell in direct support of its charitable objectives.
5. Refunding donations
If PET has already accepted a donation, it may be refunded if a donor correctly exercises their right to a refund (FR Code 2.2.3) but otherwise a refund can only be given in exceptional circumstances:
- if the terms and conditions of the gift provide for it to be returned in particular circumstances; or
- where the law specifically provides for the gift to be returned in particular circumstances; or
- by way of an “ex-gratia payment” (a payment made as a result of a compelling moral, but not legal, obligation). This type of donation return will only be permitted where the charity has received an order from the Charity Commission for England and Wales.
If the SMT or Trustees are unclear for any reason as to whether a donation should be refunded they will seek additional legal advice.
Policy lead: Head of Fundraising and External Affairs
Date agreed: March 2017
Date of last review: February 2026
Date due for review: July 2028
