Donations to Ukraine Appeals – Information for Charities

The humanitarian crisis in Ukraine cannot be ignored. Many of our charity clients have expressed interest in demonstrating their support and solidarity and have reached out to us to check what they should consider when deciding how that support should be given. 

First and foremost, the UK Government has already issued guidance on the best means of support, quoting organisations such as the Disasters Emergency Committee (DEC) or British Red Cross, with the over-riding principle being ‘give safely’. This information can be found here. 

For charities/community groups that have simply acted as the conduit – by leaving out a collection tin in the staff break out area, or designating a room to leave clothing and items for onwards collection – then this raises little concern. It is unlikely that either the funds raised, or goods collected in this instance would need to transact through the financial records of the charity.  

Extra care should be taken however, when existing charitable funds are being considered for donation. In such a case, we would strongly advise our charity clients to consider the following points: 

1. Does the scope of your charitable objectives stretch to include supporting the humanitarian crises in Ukraine?  
2. Do the Trustees of the charity unanimously agree that this donation is in furtherance of the charity’s objectives? 
3. Is there something in the charity’s constitution or governing document that may create a barrier? 
4. Are the funds being donated free from restriction? 
5. Could there be any potential backlash or negativity from your existing funders regarding the donation which would impact the charity’s ability to receive funds from them in the future? 
6. In the case of donations that are being made directly to Ukrainian beneficiaries, what due diligence / risk assessment has been conducted to ensure the charity minimises its exposure to risk? How can the charity satisfy itself that the funds donated will be utilised appropriately? 
7. Should the charity notify the appropriate charity regulator prior to making this donation? 
8. Where the charity provides non-monetary aid in the form of donated goods to Ukraine (or the surrounding countries), has the charity considered the VAT consequences?  In particular, the potential scope for enhanced VAT recovery. 

Charity Trustees have a duty to act in the best interests of their charity. Considerations such as those noted above must be taken to ensure that any action (including sending donations to support the humanitarian crisis in Ukraine) does not create a conflict of interest or give rise to potential misappropriation of charitable funds.  

If the donation is deemed to be within the remit of the charity’s objectives, then we would also advise our charity clients to keep their applicable charity regulator (OSCR/ Charities Commission etc.) in the loop. Although unlikely to be considered a ‘Notifiable Event’ in the eyes of the charity regulators, it would be strongly advised to inform them, particularly where the donation is considered a significant divergence from the ‘normal’ activities of the charity.  

Ultimately, the Trustees must make the final decision, but we strongly urge charities to be mindful of the points above when deciding on the best course of action.  

Make no rash decisions (particularly given the urgency of the crisis at hand) and consider all options. Practice good governance and minute all decisions made and the rationale for them.       

It should also be noted that non-monetary support, such as the UK Government’s recently launched ‘Homes for Ukraine’ scheme is opened to UK individuals but extends to charities, community groups and businesses. Information on this can be found here.   

At this time, our thoughts are with colleagues, clients and contacts and their families and friends, who are impacted by the humanitarian crisis in Ukraine. 

If you would like more information or guidance on issues relating to charitable funds or organisations, please contact Jakub Rolinski, Audit Senior Manager and member of our dedicated Public Sector & Not For Profit team.

Find out more about AAB’s Public Sector & Not For Profit team here.