26 March 2019
You may have read in the press recently the controversy surrounding the Sackler Trust. A number of organisations have declined donations from the Trust due to its alleged links to the ‘Opioid Crisis’ in the United States. This has resulted in the Trust pausing philanthropic giving in the UK until related legal cases in the US are resolved.
The Sackler Trust has supported a number of museums and education institutions in the UK, many of which are leaders in scientific research, and this pause is likely to significantly affect recipients.
The above episode demonstrates how important a charity’s reputation is. Trustees are more concerned about ensuring that the sources of their funds are derived ethically than accepting money which could advance scientific discovery in the future.
Guidance from the Charity Commission
In 2013, the UK Charity Commission issued guidance to charities on how they could best protect their reputations. This was issued due to a number of high profile cases which affected the reputation of some charities in the UK.
Whilst not exhaustive, the Commission states that this comes down to good decision-making which can be categorised as follows;
- Legal powers – making sure you have the power to take your charity in a certain direction.
- Information – making sure you have enough information and the right information, including good expert advice where relevant and evidence of the long-term implications of the decision; also weighing up the information to make sure your decision is based only on considerations that are relevant to the charity.
- Motivation – making sure you are motivated only by the charity’s best interests, not the interests of any other organisation or individual.
- Reasonableness – satisfying yourself that your decision is within the range of decisions that a reasonable trustee body might have made in the circumstances.
Although charities generally exist to improve the lives of those in society, it is clear that stakeholders expect charities to behave ethically. However, it is not always clear what is ethical and what is not. An activity by a charity may be praised by some and criticised by others; trustees have a difficult job navigating this area. It is hoped that if trustees follow the decision-making process above, this will go a long way to protect their charity’s reputation.
A link to the Charity Commission’s guidance in this area is noted here.
If you would like to discuss this or any aspect of your charity, please contact your nearest UHY charity sector expert here. Alternatively, you can read more about the services we provide to charities and their trustees here.
