Elizabeth Balgobin: Should we accept the 'bad' money and use it for good?

Our columnist looks at when it's right to turn down money and what it says about a charity

Elizabeth Balgobin
Elizabeth Balgobin

It's that sitting-in-a-bath-of-baked-beans and dressing-up-as-a-kipper time of year again - BBC Children in Need will be upon us on 15 November. Some fundraising stunts are hair-raising and some are just plain barmy. I can't think of a month when I haven't had a request to sponsor someone to run a long way, for one good cause or another. It is wonderful and amazing that people put themselves through the whole rigmarole of fundraising and that others sponsor them to do it.

I have done my own fair share of running (a very loose term in my case, as it transpires my walking is much faster than my running) for charity and I sponsor others when I can. This summer I hatched my own madcap plan in aid of Paddlers for Life, a wonderful organisation in the Lake District, Cumbria, which needs to raise money to keep its dragon boats going. It is small, local and very niche, and every penny will help in a very individual way. As you might have guessed, I am fond of this charity.

I worked out what I was going to do and discussed it with lots of people. I devised a marketing strategy that used social media, new technologies and blogs to reach out to a wider audience. I presented the idea to someone from the charity and waited. It was turned down. My idea was too madcap and hair-raising for them. That got me thinking about the board's role in deciding what can acceptably be sanctioned for fundraising - when to turn down money and what it says about the charity.

An interesting recent example is the aid charity Cafod, which turned down royalties from the memoir by Damian McBride, the Labour spin doctor and Cafod's communications director. The trustees employ McBride but declined the donation after reflecting on the views of the Catholic community. Respect for the community and reputation is an important factor in deciding from where to accept money. What is less clear is whether the effect on the community would be better if the board had accepted the money and then washed it clean through doing good work for the community. The opinion of those who advised that it would be bad to accept the money might be a minority view.

Therein lies the problem for trustees. Balancing a duty to manage the finances and do what is necessary to further the objects with the duty to manage the risks is not always straightforward.

Where there is an obvious conflict of interests, it might be easier. An extreme example might be an animal welfare charity refusing to accept funding from a private vivisection company. That said, I know of sustainability and environmental charities that have relationships - which include funding and joint activities - with petrochemical companies. So maybe it's not that clear cut.

Accepting money only from safe sources might have its own risks. If those sources diminish or even dry up, will the charity still be able to deliver its work? The board might well have lost the muscle to consider riskier options and take other opportunities. The sector is hardly known for its risk-taking trustees, but do we consider the right risks when deciding to turn away money?

Do trustees consider the risk-to-benefit ratio? Reputation is, after all, a management issue, so can good handling of a risky donation tip the balance in favour of taking the money? Is there even an argument that you should take the 'bad' (but legal, I hasten to add) money and use it for good?

In my little fantasy world, I think that I would accept the money and do my best to get the rest of the board to agree. We could make a good story about why we accepted it and set out exactly how it would be spent. My fantasy culminates in the baddie mending his or her ways and becoming the philanthropist that everyone wants as their patron.

On a realistic level, the best you can do is to think about it, have a broad policy on what is considered ethically safe and when a discussion on the risk should take place, and keep a clear record of why a decision has been made. Not many of us will be in Cafod's situation, but we might come across the Paddlers for Life dilemma, where an enthusiastic supporter goes a little mad with her idea.

My small plea to you is to give to Paddlers for Life, or a charity of your choice, to stop me from doing something mad to raise funds.

Elizabeth Balgobin is chair of Voice4Change England and a charity governance consultant

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