This section forms part of GIACC’s overall guidance on gifts, hospitality, entertainment, donations and other benefits (“Benefits”). It gives specific guidance on dealing with the corruption risk in relation to political and charitable donations.
Separate sections deal with the corruption risk in relation to other categories of Benefit. These other sections can be accessed on the following links:
See Benefits Policy for a sample policy which an organisation can adapt and use.
Note that this guidance is in relation to political and charitable donations which are being given or received in a business context, and is not applicable to any such donations given entirely in a personal context.
Political donations are the giving or providing, directly or indirectly, of cash, venues, equipment, personnel time or other benefit to a political party, or to an individual who is standing for elected office, or to an individual or organisation who is nominated by or connected with a candidate for office, a political party or a member of a political party.
Charitable donations are the giving or providing, directly or indirectly, of cash, venues, equipment, personnel time or other benefit to a charity, or to an individual or organisation who is nominated by or connected with a charity.
A donation could be considered to be a bribe if it is given or received with the intention of influencing someone to act improperly, or as a reward for having acted improperly.
Donations which are not likely to be regarded as corrupt include:
Donations which are more likely to be regarded as corrupt include:
To counter the risk of political or charitable donations being corrupt, or being perceived to be corrupt, or being in breach of applicable law, an organisation may totally prohibit the offer or provision of political and charitable donations by or on behalf of the organisation.
In many countries, political donations may be restricted by law. For example:
It is difficult for an organisation to ban its personnel from making personal political donations out of their own funds, as this could be a restriction on their right to support a particular party or individual. However, it is likely to be appropriate to prohibit personnel from making personal donations where these could be connected, or be seen to be connected, with a decision by a public sector body in relation to the organisation’s business. Where personnel are permitted to make personal donations, the organisation should remain completely independent of such donations. For example, it should never pay or repay the personnel’s donations, or co-ordinate or organise the personnel’s donations.
Charitable donations are normally very different in concept to political donations. Most charities have no connection with politics and have no decision making role or influence over public sector procurement decisions, and so pose a minimal risk to an organisation that a charitable donation could be corrupt or be perceived to be corrupt. Many organisations see charitable giving as an important part of their corporate social responsibility programme. Therefore, a total prohibition of charitable donations may be inappropriate. However, there is a risk that a charity could be connected to a political party or a person with a decision making function, or that the charity may be placing or managing contracts, so the organisation does need to control charitable donations (see section 4.3 below).
The organisation may prefer not to implement a total prohibition of political and/or charitable donations. It may instead implement a partial prohibition by, for example, limiting the quantum of donations, and restricting the circumstances in which donations can be given (see section 4.3 below).
For the reasons in section 4.1 above:
The organisation should implement effective controls over political and charitable donations, so as to minimise the risk that they could be corruptly given, or be perceived to be corruptly given.
The following are recommended controls, and some factors to be taken into account in implementing these controls.
If the giving of political and/or charitable donations is wholly or partially prohibited or restricted by the organisation, or by law, then state the prohibition or restriction in the organisation’s policy.
The intention behind the donation should always be considered. If it could be intended to influence someone to act improperly, it should not be given.
Do not give a donation if it could reasonably be perceived to be corrupt. There are two common perception tests:
Before giving a donation, ensure that the law of the territory, and the regulations of the recipient, allow such a donation.
The purpose of this due diligence is to ascertain whether there is any connection between the political party or charity, and any business transactions, organisations or individuals with which the organisation is involved, or is likely to be involved. As with all due diligence, the level of enquiry depends on the circumstances, and should be reasonable and proportionate.
If the due diligence above establishes a connection, then there is a risk that the donation could be an attempt to influence an outcome, or could be perceived to be such an attempt. Either avoid making a donation in these circumstances, or only make it if there is reasonable certainty that it could not influence, or be perceived to influence, an outcome.
In some cases, the law requires donations to be disclosed on a public register or in the organisation’s annual accounts. Even if not required, some organisations voluntarily disclose donations on the basis that transparency can help avoid the perception of corruption.
Require approval in advance of the donation from the compliance manager (and, if appropriate from an additional senior manager). The amount which it may be permissible to give for a charitable or political donation could be significantly higher than the amount allowed for a gift to an individual under the organisation’s gifts policy. Therefore, appropriate approval should be obtained in advance. The reasons for the request and the approval should be documented, and the compliance manager must be satisfied that the donation is appropriate, and is not corrupt, and could not reasonably be perceived to be corrupt.
Donations given and received should be recorded in a register or other appropriate record.
Updated on 10th April 2020