Charity Commission publishes guidance on verifying unfamiliar donors

Trustees urged to question provenance of money to avoid suspicion of money laundering or tax evasion

Charity Commission
Charity Commission

Charity trustees should question where donated money has come from if it is given to them by an unfamiliar donor who runs a business or is from outside the UK, according to new guidance from the Charity Commission.

A new section of the commission’s Compliance Toolkit: Protecting Charities from Harm guide, published today, stresses the importance of charities knowing who their donors in order to avoid being targeted for illicit activities such as money laundering or tax evasion.

"Trustees should also be reasonably assured about the provenance of funds and the conditions attached to them," says the guide. "If there are particular risks - for example, where an unfamiliar donor operates a business or is perhaps from a country outside the UK about which public concerns have been raised - then the trustees should take more steps to verify the provenance of the funds."

The guide says that charities can accept anonymous donations. "This is perfectly acceptable, providing charities look out for suspicious circumstances and put adequate safeguards in place," it says.

The guide says trustees should also carry out checks on the partner organisations they work with and the beneficiaries they award grants to. 

A spokeswoman for the commission said it had published the guidance because informal consultation with the sector showed charities wanted more information about how to protect themselves from abuse.

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