When to look a gift horse in the mouth: Legacies and ethical and reputational risks

15 Jul 2019 Voices

Leticia Jennings and Laura Soley offer some advice for charities concerned about the ethical and reputational risks that can be associated with some legacy donations.

Bates Wells’ charity legacies team recently held an event on legacies with ethical and reputational risks, aimed at helping charities deal with the challenging but very relevant issues (bearing in mind the very many media articles) of when they can refuse or return a legacy. 

Helping us to consider when charities should look a gift-horse in the mouth were James Stebbings from Macmillan Cancer Support and Sianne Haldane and Rebecca Massey from Cancer Research UK, sharing their thoughts and experiences from a charity perspective, as well as Civil Society’s very own Kirsty Weakley adding useful insights from a press perspective. We finished off with a lively and thought-provoking panel discussion, which set us thinking about some of the practical steps charities can take to address a subject which is often difficult to navigate.

This area has become a minefield for charities (and a gold mine for tabloid journalists!). It feels that ever since the Presidents Club scandal, the public (or at least the press) have held charities to an extremely high standard and expected them to keep up with and make decisions based on fast changing – often knee-jerk - moral benchmarks. 

How decisions are presented

One key theme which keeps emerging is the importance of how charities present their decisions. Charities need to have a gift acceptance policy in place setting out how they will deal with legacies that come with risks. Besides ensuring that charities can show how and why a particular decision has been made, any policy of this kind also needs to be robust enough to reassure stakeholders that charities are taking these issues seriously. 

Kirsty Weakley talked about how it is better for charities to set the narrative with any publicity and be up front and positive about their decisions even if they have decided to accept a legacy that may appear controversial: defensiveness often feeds negativity and can make matters worse. Speakers from Macmillan and CRUK agreed, adding the importance of preparing a cogent press release in the event the matter becomes public.

More guidance needed

Another significant issue (and one that emerged during our seminar) is that whilst there is a wealth of guidance material covering these issues, there is not much that is specific to legacies (as opposed to lifetime donations).

The Charity Commission is currently consulting on producing guidance on refusing donations, and we would like to strongly encourage the Commission to specifically address the issues in relation to legacies. A matter which continues to provoke particular debate is the level of due diligence that charities should be carrying out in relation to gifts – and legacies in particular – with some charities doing only limited due diligence on legators and some doing none at all. It would be particularly useful for the Charity Commission to set out its expectations in this area. There are also some grey areas in relation to when charities need to involve the Commission in their decision.

Top tips

In the meantime, conscious that charities can find themselves in difficult situations requiring decisive action, we recommend they follow our four top tips: 

  • Legacies should only be refused/rejected/returned in exceptional circumstances – you can be robust.
  • All charities ought to have a gift acceptance policy in place enabling charities to consider the issues and properly document the decision making process.
  • There is no “one size fits all” approach that charities can or should take, but a good policy ought to set a clear objective suitable for the particular charity, the principles To guide the charity’s decision making, what due diligence steps the charity will undertake, as well as practical steps such as keeping full written records.
  • Charities should not be afraid of the press, and should consider how to present their decisions positively with a well thought through media response prepared in advance. 

Leticia Jennings and Laura Soley are partners at Bates Wells

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