Opinion

Too good to be true?

Governance | 1 Nov 2006

Robert Venables responds to an anxious chair unsure whether or not to accept a substantial strings-attached donation.

Dear editor,

We are a medium-sized charity which helps people with major debilitating illnesses. We were recently approached by one of our regular commercial supporters. The commercial organisation wants to give us a donation of £50,000 on condition that the amount goes in its entirety to a particular person. The gift falls within our charitable objects and the proposed beneficiary satisfies all our criteria although we would not normally give him, or any other beneficiary, such a large single payment. The commercial organisation assures us that there should be no problem and all we have to do is to treat it as a restricted fund and use the money exactly as the donor wishes.

My instincts tell me something isn't quite right. I cannot put my finger on it. Am I worrying unnecessarily or can I recommend to my fellow trustees that we accept the donation and do as the donor wishes?

Yours sincerely,

A chair whose instincts say something is wrong

Dear Chair,

It is good, in principle, to trust your instincts.

In your letter you suggest that you do not know enough about either the proposed donor or the beneficiary to be confident that nothing is wrong. Further enquiry might show that there is nothing to worry about or that there is a lot. Proceed cautiously even well known and highly respected organisations have been known to try to evade tax.

From what you say, there is no question about your having the necessary legal powers to do what is being asked of your charity. The issue is whether you would be using them properly. You need to be confident that you are doing so.

The risk is that the money is proceeds of crime (which includes tax evasion) and that the donor is trying to launder the money. By using your respectable charity he tries to make the money respectable. If he is, and you take part, your reputation and possibly your liberty are at stake.

If you suspect this, do not accept the money even to repay it. That will help to provide cover just as much as if you pay it to the beneficiary. Do not allow the donor to make the payment direct to your bank account. Do not give account details. Once you have the money you may find it difficult to get rid of without committing an offence. Worse still, you will not be able to say anything about why you will not part with it without committing the further offence of 'tipping off', ie giving a warning to the suspected money launderer. If you have evidence to suggest this is happening, report it to Serious and Organised Crime Agency and follow their advice. Their website is www.soca.gov.uk.

Robert Venables is a trustee for Vision Aid Overseas, a consultant for Bircham Dyson Bell and the former legal charity commissioner

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