Creating a fundraising or gift acceptance policy
The below steps outline some practical methods of getting started, so that cultural organisations can develop a fundraising or gift acceptance policy which is grounded in UK charity governance regulation.
In charities, this process should be led by the Board of Trustees. In other types of organisations, a designated leadership team needs to take ownership.
Creating a fundraising or gift acceptance policy for mid-scale to large-scale cultural organisations
In larger-scale cultural organisations, or those with the resources to do so, it may be both feasible and prudent to create a committee to look at risks and reputation in fundraising and to oversee the implementation of an associated fundraising or gift acceptance policy. This will allow for an objective view, continual oversight of funding sources and monitoring.
Trustees are ultimately responsible for fundraising practices and must balance this process with the financial sustainability of the organisation, and their legal duties set out by the Charity Commission. All decisions should be made in an objective manner that ensures public benefit and aligns with organisational purpose and charitable objects as set out in your organisation’s terms of reference.
A Board, committee, or process, could therefore be established to ensure that there remains a strong oversight of reputational concerns on an ongoing basis and to deal with issues as they may arise. A suggested framework for creating such a fundraising or gift acceptance policy for mid-scale to large cultural organisations follows below:
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Clarity purpose and scope
The first step is to agree why the organisation needs a policy and what it will cover.
Most fundraising or gift acceptance policies focus on:
- The principles of acceptance, refusal and return of donations
- Sponsorship and partnerships (corporate and individual)
- Reputational risks
- Decision-making authority and escalation of decisions, i.e.to the Board
At this stage, organisations should confirm whether the policy applies to all income streams (including grants, sponsorship, individual donors and earned income), or only to specific areas. It should also be clear if it covers wider aspects of operations or investment, such as the organisation’s existing suppliers or third-party contracts. Guidance from the Charity Commission stresses that trustees are ultimately responsible for ensuring that fundraising decisions are made in the charity’s best interests.
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Anchor the policy in the organisation’s charitable purpose
Effective policies are rooted in the organisation’s charitable purpose and stated public commitments (for example on inclusion, environmental responsibility, or artistic independence).
This step usually involves:
- Reviewing existing charitable purpose and public commitment statements
- Identifying non-negotiable organisational principles (e.g. how the organisation protects artistic/ curatorial independence)
- Clarifying areas where compromise may be acceptable
The aim is not to predict every future scenario, but to establish clear reference points against which fundraising decisions can be tested.
It is also important to consider potential wider reputational issues. Asking questions such as ‘What impact might a certain funding partnership have on our reputation?’ can play a key role in an organisation’s decision-making process.
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Review legal and regulatory guidance
Before drafting, organisations should review relevant external guidance to ensure that the policy aligns with legal duties and sector standards.
Common reference points include:
- Charity Commission guidance on accepting, refusing and returning donations and the Know your donor principles
- Fundraising Regulator Code of Fundraising Practice
- Guidance from the Chartered Institute of Fundraising – Acceptance, refusal and return – A Practical Guide to dealing with donations
- Guidance from Arts Council England (commission in 2018) – A Practical Guide to Lawful Fundraising
A vital part of this examination is to also ensure that your trustees have a clear understanding of their legal responsibilities and for charities to ensure that the decisions that are made meet the Charity Commission’s public benefit requirement. This helps to ensure that the policy reflects the Commission’s position that the starting point is usually to accept donations, whilst still allowing for refusal where reputational risks outweigh the benefit.
These sources need to be reviewed regularly, and organisations should keep an eye on any updates to guidance or legislation within the sector.
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Identify key risk areas
Organisations then map potential reputational risks, informed by their organisational context and past experience.
This might include:
- Activities that could conflict with their organisation’s stated public commitments
- Geopolitical or environmental sensitivities
- Naming rights and visibility issues
- Artist, audience, staff or community concerns
Many organisations use a risk-based approach, assessing the likelihood, severity, and mitigations, rather than relying on absolute “blacklists”(things that should be excluded or avoided which could include whole industries). Creating a funding decision-making checklist may also be helpful.
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Consult internally and, where appropriate, externally
Strong policies are rarely written in isolation. Where possible, organisations might also seek to embrace open dialogue and encourage collaboration into the process. Consultation often includes:
- Trustees (often via a working group)
- Senior leadership and fundraising teams
- Staff representatives, artists or practitioners
- Key stakeholders or advisors
- Existing funders or donors
This stage helps to surface practical concerns, builds buy-in, and avoids policies that look strong on paper, but which are difficult to implement. It also ensures that stakeholders are aware of the organisation’s legal obligations, as well as that all decisions are made in the best interests of the organisation. This means considering the views of individuals but recognising that achieving a balanced organisational view is the overriding consideration.
“Sharing decision-making can help build a reputation for transparency, drawing others to you and increasing their understanding of your work. In turn, this can increase the likelihood of a diverse set of people lending support, if and when needed.” What Next? Culture
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Define decision-making and governance
A robust policy clearly sets out:
- Who can approve fundraising relationships and partnerships
- When issues must be escalated and to whom e.g. Board of trustees
- How conflicts of interest are managed
- How decisions are documented
Many organisations specify thresholds (for example, high-value or high-risk donations requiring trustee approval) and outline how urgent decisions are handled. Some organisations will have a committee, panel or advisory group (including trustees) that will support decision-making processes around fundraising in realtime.
This clarity protects both staff and trustees if decisions are later scrutinised in the media, or by funders or regulators.
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Draft the policy in clear, plain-talking language
Fundraising policies work best when they are:
- Concise and practical
- Supported by examples or decision tests
Many organisations include short checklists or guiding questions to help staff apply the policy consistently.
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Approve, publish and communicate
Once a policy has been devised, it is important to communicate this with your audiences, staff, donors, partners and other key stakeholders. Some organisations choose to make their policy (or a summary of it) available online, with a clear explanation of the reasoning behind the content of the policy. An example, is Factory International’s Brave Spaces Principles.
Once approved by trustees for cultural charities, or the designated leadership team in other types of organisational structure, organisations typically:
- Brief staff, freelancers and board members and other relevant stakeholders
- Integrate the policy into fundraising procedures and training
Transparency about how decisions are made can be as important as the decisions themselves.
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Review regularly
Risks and reputational contexts change. Best practice is to:
- Review the policy at least every year and remain reflective and responsive to both the operating environment and public and stakeholder opinion
- Revisit the policy after a major controversy or funding decision and in relation to regular horizon scanning and changes in the geopolitical environment
- Update the policy in response to legal or sector guidance changes
Regulators and funders such as Arts Council England increasingly emphasise ongoing governance review, rather than one-off policy creation.
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In summary
An effective fundraising policy is most effective when it is:
- Risk-aware rather than reactive or too prescriptive
- Offers clarity and consistency
- Clearly governed and regularly reviewed
Charity Commission aligned wording relating to their guidance on Accepting, refusing and returning donations, that you can use in your policy
“In line with Charity Commission guidance, the charity’s starting point is to accept and retain donations to further its charitable purposes. However, trustees may decide to refuse or return a donation where they have the legal power to do so and reasonably conclude that this is in the charity’s best interests, having considered all relevant factors. Decisions will be appropriately documented, including the rationale for the outcome reached.”
Creating a fundraising or gift acceptance policy for smaller-scale and grassroots cultural organisations or non-registered charities
For smaller-scale and grassroots cultural organisations or non-registered charities, the following framework to create a fundraising or gift acceptance policy is suggested.
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Assign a leader to create the policy supported by a small working group
- Assign one lead (often theDirector / Producer or fundraising lead).
- Create a small working group: 1trustee + 1 staff member + (optional) 1freelancer / artist representative.
Deliverable: named lead + working group + timeline.
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Define what the fundraising policy covers
Keep it realistic.
- Decide whether the policy applies to:
- Donations (cash / in-kind)
- Individual donors
- Trusts & foundations
- Corporate sponsorship / partnerships
- Venue hires / Commercial relationships (optional)
- Naming rights (if relevant)
Deliverable: one-paragraph scoping statement.
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Agree your “non-negotiables”
Pick 3-6 principles for your fundraising policy linked to your organisational purpose and community / beneficiaries.
Examples include:
- Artistic or curatorial independence
- Inclusion and safeguarding
- Environmental responsibility
- Human rights / equality
- Transparency and accountability
Deliverable: Create a shortlist of core principles, written clearly in plain English
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Choose your approach: checklist, or risk scoring
This might include:
- Red lines (few):the basis or sources of funds you will not accept
- Risk review: how you will undertake due diligence on all other sources of funding
Deliverable: A one-page fundraising decision test Creating a funding decision-making checklist may be helpful.
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Create your fundraising “red lines”
(keep it short)
Only include examples of types of funding that you definitely will not accept, for example:
- Funding tied to illegal activity
- Funding that restricts artistic / curatorial content or programming
- Funding that conflicts with safeguarding duties
- Funding requiring misleading branding or “endorsement”
Deliverable: 4-8 red lines as a maximum
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Add a quick “reputational risk” check
Develop five risk questions for your team to answer:
1 Does this source of funding align with our organisational purpose?
2 Could this funding harm trust with our community / beneficiaries?
3 Are there credible concerns about the funder’s activities?
4 What visibility comes with the funding (logos, naming, PR)?
5 If this funding or association became public tomorrow, could we defend it?
Deliverable: Reusable check list template.
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Decide who decides (very important)
Smaller organisations need to be able to make decisions with speed and clarity, an example decision making framework may include:
- Low risk / low value funding: approved by Director / Producer
- Higher risk or high value funding: escalate to Chair /Director + one trustee (or full board if time allows)
- Urgent decisions funding: specify who can act quickly and how decisions will be recorded
Deliverable: Simple approval thresholds for making funding decisions and escalation routes if required.
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Add conflict-of-interest steps
- Require trustees / staff to declare conflicts, making it clear how conflicts might present themselves in your organisational context
- If someone has a conflict,they step back from the decision
Deliverable: 3-line process statement on managing conflicts
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Document decisions
Keep a log of fundraising:
- Who / what funding has been received, pursued or declined
- What risks have been identified
- What decisions and rationale has the organisation undertaken for accepting or declining funding
- Any conditions or mitigations (e.g., no branding, limited visibility)
Deliverable: A one-page “Donation & Sponsorship Decision Log”
Fundraising decision flowchart for mid-scale to large-scale cultural organisations
A fundraising decision flowchart – could be useful for your organisation to identify key risk areas for fundraising. The framework should be used alongside the step-by-step guide on how to create a Fundraising and Gift Acceptance Policy and the Fundraising and Gift Acceptance Policy template.
1. Best Interests Starting Point
Is there a reason why accepting this donation might not be in the charity’s best interest?
The Charity Commission’s starting point is that charities should generally accept and retain donations to further their purposes.
If Clear Reason No – Decline
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2. Purpose and Public Benefit
Would accepting the donation further the charity’s purposes and public benefit?
Consider: Alignment with charitable objectives, benefit to beneficiaries, delivery of artistic cultural or educational outcomes.
NO – Decline
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3. Legal and Regulatory Test
Is the donation lawful and compliant with charity law or other legal duties?
Check: Legality of the source, safeguarding, equality & health & safety duties, restrictions on political activity.
Uncertain – Seek Legal Advice
NO – Decline
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4. Relevant Factors Assessment (with reputation as one of several considerations)
Is there a risk that accepting this donation could damage the charity’s reputation or undermine public trust & confidence?
Consider: credibility or concerns, likely reaction of stakeholders, impact on fundraising, partnership & delivery
Medium Risk – Mitigation
High Risk – Decline
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5. Conditions and Independence Test
Are there conditions attached that could compromise the charity’s independence, governance or ability to pursue its purposes?
If conditions are:
Manageable – Proceed with mitigation;
Fail Test –Decline or Negotiate
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6. Proportionality and Mitigation Test
Can any risks be managed reasonably?
Possible mitigations: Limiting visibility, time-limited acceptance, clear separation from decision making, transparency in communications.
If risks are not manageable – Renegotiate or decline.
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7. Trustee Decision and Escalation
Is this decision within delegated authority?
Decision-makers should ensure they are sufficiently informed, take account of relevant considerations, disregard irrelevant factors, manage conflicts appropriately and reach a decision that is rational and reasonable in the circumstances.
Low Risk – Executive
Significant Risk – Chair and Trustee
High Risk – Whole Board
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8. Record the Decision
Has the decision and rationale been recorded?
Record: Risks identified, benefits considered, alternatives explored, reasons for decision making.
Only proceed if recorded
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Final Trustee Sense Check
Can trustees reasonably justify this decision as being in the charity’s best interests if challenged?
Fundraising decision flowchart for small-scale and grass-roots cultural organisations
Donation / Sponsorship Offered
1. Any reason that it might NOT be in our organisation’s best interests?
Yes – Pause and Assess
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2. Does it further our charitable purposes and public benefit (or organisational purpose if not a charity)?
NO – Decline
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3. Is it lawful and compliant with our duties?
Uncertain – Seek Legal Advice
NO – Decline
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4. Could it reasonably harm our organisation’s trust or reputation?
Yes – Discuss with Chair / Trustees
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5. Any conditions affecting independence or delivery?
Yes – Renegotiate or Decline
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6. Can we justify this funding as reasonable and proportionate
NO – Decline
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7. Record decision and rationale