Guidance is being developed by the Charity Commission that “will compel trustees to think more carefully about returning or refusing donations”, the regulator’s chair Orlando Fraser has revealed.

The move would see charities review policies on returning or refusing donations to ensure “they are fundamentally in the best interests of the charity, rather than reflecting the opinions of those who wrote them”.

“One example of materially irrational decision-making would be when it is apparent that the motivations for a return or refusal are simply the personal worldviews or preferences of the relevant trustees,” he said.

“Demonstrative personal squeamishness around sources of philanthropic funding may benefit the sense of righteous progressiveness of a trustee or charity executive, but it will most likely not serve the beneficiary reliant on the services a charity provides.”

Fraser claims the move will “prompt charities to examine” and improve their relationships with donors, suggesting it would help develop more unrestricted funding for the sector “a funding style I know many charities covet”.

Charities will need a “significant” reason for wanting to refuse or return a donation, said Fraser.

This includes ensuring charities do not accept illegal donation and “on occasion, decide that accepting a lawful donation would, for reputational reasons, on balance cause more harm than good to their beneficiaries and their cause”.

“In this area, as in many others, largely speaking the Commission will respect the trustees’ exercise of their discretion, and thus will rarely intervene when trustees decide to accept, refuse or return a donation,” he said.

Be we warned that “rarely is not never”, adding that the regulator “may well intervene if we consider that such intervention would be consistent with our Risk and Regulatory Framework, including if any decision-making is materially irrational”.

Former Conservative Party parliamentary candidate Fraser has revealed the crackdown on refusing or returning donations during a speech at the University of Kent.

He added: “I want to signal, quite clearly, that the law generally expects charities to accept monies where they are available, in order to deliver on their purposes for the public benefit, and not to refuse or return them without very good reason.

“This is because the law recognises that additional funds increase the activities that can be undertaken to deliver charitable purposes, and the refusal or return of a donation inevitably involves a loss to the charity, and a reduction in those activities.”

Fraser’s comments have been criticised by Jo Maugham, barrister and founder of the Good Law Project, which is critical of the influence of climate change denying lobby groups.

“Under Orlando Fraser's watch, the Charity Commission funnels public money to organisations disseminating hate and lying about the climate catastrophe. He does nothing about that,” he said.

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