Ethical Gifts Policy

Context

Equality Network is a values-led organisation and, as such, all of our decision-making should sit within our values framework of diversity, equality, human rights, collaboration and consultation, and sit easily alongside our listening, inclusivity and respect.

Equality Network is a Scottish charity which relies on relationships and partnerships to support our work, and we are funded by a mixture of voluntary and statutory donations. We also regularly receive gifts in kind including pro-bono support and partnership support.

Acceptance or Refusal of Gifts

Donations to charities are essential to ensure they can deliver their core work, and should only be rejected in specific circumstances. Equality Network will refer to the Fundraising Regulator’s Code of Practice when considering whether we must return a donation, for example where conditions or restrictions attached to the gift cannot be met. We will also seek legal advice and communicate with OSCR where appropriate or required.

Donations within Equality Network are processed by the Finance and Business (F&B) Coordinator, however any donations of money, time or other support which do not sit easily within our values framework should be referred in line with this policy to the Board of Trustees. Because they have to act in the best interest of the charity in pursuing its mission, when deciding whether to refuse a donation, Trustees must only do so only if accepting it would do more harm to the charity than rejecting it.

This policy will not alter the fact that some donations feel contentious and need discussion, but it aims to provide a framework for decision-making and demonstrate to stakeholders and the wider public that we apply due diligence, are consistent in our approach, act with integrity and are to be trusted with donations and public support.

This policy aims to ensure that Equality Network actively manages risks associated with accepting and refusing gifts, and engaging with third parties and their services.

This policy should guide the Equality Network Board of Trustees in their decision of whether to refuse or accept specific gifts.

Policy

Equality Network will presume a positive position of accepting all donations except in the following situations. The primary conditions under which Equality Network will refuse a donation are:

1. That it would be unlawful to accept it. For example, Equality Network knows that the gift includes the proceeds of crime; or
2. That accepting the donation would be detrimental to the achievement of the purposes of Equality Network, as set out in its constitution, or is in conflict with the charity’s values or policies. For example, accepting a donation from a company which is known to hold transphobic views.
3. The donation comes with conditions which seem unreasonable.

Although values will be very important in reaching the decision, these cannot be the only deciding factors. Equality Network is an employer and national charity and, as such, needs to be able to demonstrate that acceptance of the donation would be detrimental to the achievement of its purposes. Such detriment, or anticipated detriment, has to be set against the benefit of accepting the gift from the donor, which enables Equality Network to pursue its purposes, pay its staff and continue its services.

For example, it may be evident that the acceptance of a donation would most likely lead to:

• The loss of donations from other supporters or funders at least equivalent, over the long term, to the value of the donation.
• The loss of volunteers and impact on our services.
• The loss of staff or the inability to recruit staff.

The Organisation needs to have at least a reasonable expectation of the potential detriment before taking it into account and deciding whether a donation should be accepted or refused. An example of a process to assist with this is included in a matrix in Appendix 1.

It is likely that these detriments will arise because acceptance would be contrary to Equality Network’s values. But before reaching the point at which Equality Network can take this into account, it must be established that:

1. Those values are those of Equality Network as set out above, and are not merely one individual’s values or beliefs.
2. It is reasonable to conclude that acceptance would be detrimental to achievement of our strategic aims; and
3. It is reasonable to conclude that such detriment is likely to be greater than the benefit in accepting the donation.

Equality Network does not need to establish an overwhelming case for refusing a gift; Trustees merely have to act reasonably. If they take account of relevant factors, disregard irrelevant ones and take a reasoned decision then they will have complied with their duties.

Other considerations

General

• The policy will apply to all kinds of donation. E.g. cash, donations-in-kind, shares, legacies, pro-bono work, sponsorship, corporate donations.
• The Policy applies to donations of any size.
• The cost of accepting a donation will be taken into consideration. This will be most relevant to restricted donations which may be undeliverable without Equality Network incurring unacceptable costs beyond the initial donation.
• This policy applies to both solicited and unsolicited donations.
• This policy can also be used to evaluate the risks in proposed external partnerships.
• Equality Network will follow a process for refusing donations (see Appendix 2).

Appointing providers/partners

It is essential for the charity to invest and/or purchase goods and services and deliver services in the most cost-effective and financially advantageous way, but this shall be done without compromise to this policy. Where financial considerations are even, preference will be given to companies that demonstrate positive social or environmental impact, and good practice in the way they conduct their business.

Conflicts of interest

It is important that all staff members avoid situations that may compromise their judgement, cause any damage to the charity’s reputation or create conflicts of interest, for their own protection as well as the charity’s.

For this reason, staff members must not accept personal gifts, gratuities, or other favours from anyone with whom the charity engages with professionally. Exceptions to this may be granted in circumstances where refusal of a gift could damage professional relationships. In such cases, staff members must seek prior approval from their line manager, who will assess the situation and determine whether acceptance of the gift is appropriate under the circumstances. This will be signed off by the CEO.

Implementing the Policy

Due to the volume of voluntary donations and the need to operate within a reasonable cost/income ratio, donations under £1,000 will not routinely be investigated unless a cause for concern is highlighted. Within resources and capacity, all notable^[1] donations will be researched briefly, both in terms of giving history and their wider profile, by the Finance and Business (F&B) Coordinator who will complete a Due Diligence report informed by research and the decision-making matrix (example in Appendix 1) and will follow the process below. Any concerns will be flagged to the CEO and if necessary a case will be prepared for Trustee deliberation. Any anonymous donation above £1,000 will be researched and escalated immediately to the CEO for investigation.

Where a donation is not from a bank or financial institution subject to Financial Conduct Authority regulations, due diligence must occur and the donation referred to the CEO prior to acceptance. Where a payment is made by transfer from a foreign bank to a UK bank, due diligence lies with the receiving bank, not Equality Network as UK banks have reciprocal arrangements regarding anti-money laundering compliance.

Only verifiable facts and reliable information will be presented, in a clear and succinct format to facilitate an informed decision by the CEO or Trustees.

The CEO or Chair will communicate the Trustees’ decision to the donor should a gift be refused, ahead of communication with press and other stakeholders, where necessary.

Appendix 1

Decision matrix

An example could look like this:

All notable donations should be reviewed as they come in, as due diligance. Often we will not have any information on the donor – sometimes not even a name – and so it is very difficult to evaluate risks around the gift. If things come to light after Equality Network have accepted the gift, the option exists to return the money, if unspent and appropriate.

However, where a gift throws up a potential conflict, the relevant staff member should complete this decision matrix and flag, along with narrative and a recommendation, to the next operson in this chain. The higher the number, the higher the estimated risk

If the decision cannot be made by the next person along it should be reffered along until a decision can be reached:

Equality Network should document the results of the risk assessment, including any decisions made and actions taken to mitigate risks on the CRM. If the donation is accepted all information on transactions, due diligence efforts, and any communication with donors should also be recorded.

Appendix 2

Process for refusing gifts

Where the risk assessment estimates a higher risk than benefit to the charity, the gift should be declined following the following procedure:

The aim of this process is to protect the reputation of the charity. All communications should follow Equality Network values, in particular respect for the donor whose intentions will almost always have been positive, along with the integrity of our own actions.

Appendix 3

Example scenarios

1. Refusing a Legacy on Ethical Grounds

Equality Network is informed that a prominent businessman, Mr. Charles Winthrop, has left a bequest of £1 million in his will to support their work. The funds could significantly expand the charity’s campaigning work, and advocate for legal protections in areas where LGBT+ rights are under attack.

Upon reviewing Mr. Winthrop’s background, Equality Network discovers that he was a co-founder and long-time financier of an organisation that actively opposed same-sex marriage legislation in the past. While Mr. Winthrop had reportedly softened his stance in recent years, he never issued a formal apology for his involvement or made a public effort to undo the harm caused by his advocacy, perhaps hoping his legacy bequest would do that job.

The Decision Process:

1. Internal Discussions:
   The F&B Coordinator flags the gift after reviewing the bequest and passes the report to the CEO as a ‘High risk gift’: Whilst the funds could provide much-needed support, they are concerned it might alienate the charity’s supporters and undermine its mission by appearing to condone or overlook Mr. Winthrop’s harmful legacy.
2. Consultation:
   The CEO makes a recommendation to the Board that the charity consults with key members of the community before a decision is taken. During the consultation, many express discomfort, arguing that accepting the funds could send a mixed message about the charity’s principles and look unsupportive of those who suffered due to the policies Mr. Winthrop once supported.
3. Public Reaction:
   Through the consultation, news of the bequest leaks to the media, prompting heated public debate and criticism from critics of the charity which argue that it would be hypocritical of the charity and render then untrustworthy on any other issues.
4. The Decision:
   The board evaluates the position and concludes that to accept the gift would do more long-term harm to the charities support than any good which could come from it. They agree to refuse the gift. Equality Network contacts the executors of the estate and also releases a public statement:
   

   “We are grateful to everyone who supports our work towards a more equal and fair Scotland. However, after much reflection and consultation, we have decided we must decline the recent legacy left to us by Mr. Charles Winthrop. While his generosity is appreciated, we must remain true to our commitment to the LGBTI community and to our values of diversity, equality and human rights. Accepting this bequest would not align with the trust placed in us by those we exist to support and we hope that Mr Winthrop’s executors will find a way to use this money to support another charity’s good work.”

5. Outcome:
   The decision earns widespread respect within the LGBTI community and amongst allies, reinforcing Equality Network’s commitment to principled work on their behalf. In the weeks following the announcement, a grassroots fundraising campaign is launched, raising a significant sum for campaigning work, allowing the charity to progress its work while staying true to its values.

2. Refusing a Large Donation

A national company, Apex Global Enterprises, approaches Equality Network with an offer of a £100,000 donation to support the charity’s work. The donation could fund several ambitious projects including a UK-wide trans rights awareness campaign.

However, research by the F&B Coordinator reveals that Apex Global Enterprises has a troubling track record on LGBTI issues which creates a high risk in accepting the gift. The company has funded political candidates and organisations that actively opposed LGBTI rights, including campaigns against same-sex marriage and anti-discrimination legislation. Apex has also been criticized for failing to create an inclusive workplace. Reports have surfaced of discriminatory hiring practices, a lack of LGBTI employee protections, and a hostile work environment for queer employees.

Many suspect that the donation is part of a public relations effort to rehabilitate the company’s tarnished image, rather than a genuine commitment to LGBTI equality.

The Decision Process:

1. Internal Deliberation:
   Equality Network’s CEO discusses the potential impact of accepting the donation with the team. While the funds could bring transformative change, they recognise the risk of damaging the charity’s reputation by appearing to endorse or overlook Apex’s harmful history.
2. Board Discussion:
   The Board reads the due diligence report and meet to discuss. The overwhelming consensus is that accepting the donation would undermine trust and conflict with the charity’s values.
3. Public Reaction:
   News of the potential donation circulates and sparks widespread debate. Some argue the money could be used to advance LGBTI rights regardless of its source, but many criticise Apex for attempting to “rainbow wash” its reputation through the donation.
4. The Decision:
   The board confirms that Equality Network have to refuse the gift. The CEO contacts Apex ahead of releasing a public statement:
   

   “Equality Network have taken the difficult decision to turn down the offer of a donation from Apex Global Enterprises. After careful consideration and consultation, the Trustees have unanimously agreed that Equality Network cannot accept funding from an entity whose past actions and continued practices conflict with our commitment to advancing equality and fairness for all LGBTI individuals. We urge Apex to demonstrate a genuine commitment to change and hope they will address the internal structures and challenges within their organisation.”

5. Outcome:
   The decision inspires a surge of grassroots support, with individual donors and socially responsible companies stepping forward to support their work. Apex, facing increased media attention and public scrutiny, announces plans to reform its internal policies and engage in genuine dialogue with LGBTI advocacy groups.

3. Rejecting an Illegal Gift

A wealthy individual, Mr. Victor McDonald, pledges a £50,000 donation to Equality Network during a high-profile parliament event. The announcement is met with applause, and the donation is framed as a generous act to support the charity’s efforts in addressing discrimination and promoting equality.

Shortly after the pledge, however, the F&B Coordinator discovers that Mr. McDonald’s wealth stems from illicit activities, including money laundering and involvement in organised crime. Several investigations into his businesses have uncovered evidence of human trafficking and illegal drug trade – activities that directly harm vulnerable communities, including LGBTI individuals.

The Decision Process:

1. Internal Investigation:
   Equality Network verifies the allegations with the help of external legal and ethical consultants. The evidence against Mr. McDonald is overwhelming, confirming that the donation originates from illegal activities. According to their Ethic Gifts policy, a gift from illegal activities has to be refused.
2. Board Discussion:
   The board convenes to confirm the decision to refuse or return the donation.
3. Consultation with Legal Authorities:
   On legal advice, Equality Network informs OSCR and anti-corruption agencies who confirm that accepting the donation could expose the charity to legal risks, including accusations of complicity in laundering illicit funds.
4. The Decision:
   Having agreed to reject the offer of a gift from Mr McDonald, the Chair of the Board writes to him ahead of Equality Network releasing a statement:
   

   “Equality Network is committed to transparency, integrity, and the well-being of the communities we serve. After careful consideration, we have unanimously agreed to refuse the pledge of £50,000 from Mr. Victor McDonald upon learning that the funds are linked to activities that are incompatible with our mission and values. We stand firmly against exploitation and harm, and we will continue to prioritise a values-led approach above financial gain in all aspects of our work.”

5. Outcome:
   The decision is publicly endorsed by OSCR and results in positive commentary on social media leading to increased donations from other high-net worth individuals.

Footnotes

1. Gifts of more than £1,000 or from a legacy, public organisation or high profile individual. (Return to reference [1])