Note: MUST* and MUST NOT* (with asterisk) denotes legal requirement
MUST and MUST NOT (without asterisk) denotes requirement of the Code of Fundraising Practice
11.1 Legal References in this Section
- General trust law principles
- Proceeds of Crime Act 2002
The following Legal Appendices MUST be read in conjunction with this section of the Code of Fundraising Practice
“Major donor” is an individual or family with the potential to make or procure a gift which would have a significant impact on the work of the organisation.
11.3 Money Laundering
a) Trustees MUST* take reasonable steps to assess and manage risks to their organisation’s activities, beneficiaries, property, work and reputation. Money laundering and adverse publicity about a donor are examples of how an organisation could be exposed to criminal liability and suffer reputational damage.
b) Organisations MUST undertake due diligence on both the financial and reputational dealings of potential partners before donations are accepted.
c) Fundraisers MUST be aware of the Proceeds of Crime Act 2002 and that it applies to money or other property that has been obtained through conduct that is criminal under UK law, even if obtained in ways that are legal in another country.
11.4 General Requirements
a) If giving gifts to a major donor, fundraising organisations MUST ensure that any benefits are appropriate for the organisation to be giving, and proportionate to the size of the donation received.
Note that some benefits may cause Gift Aid relief to be lost and others may be subject to the tainted donations rules.
b) Where talking about finances and financial benefits, fundraisers MUST inform donors that they are not in a position to offer formal financial advice.
There is more information about major donor fundraising in the Institute of Fundraising Major Donor guidance.