Donations, sponsorship and the need for accountability

Donations and sponsorship add up to big money in the public sector. Most hospitals have at least one fundraising campaign. Local authorities have long sought and received corporate funding for roadside planting and summer festivals. You can even sponsor a police car. But as cash flow gets tighter and new sources of income look more appealing, it is important that we think carefully about where the money comes from.

People and companies rarely give money for nothing. They usually expect something in return. In some cases, of course, this is nothing more than the warm fuzzy feeling that comes from contributing to their local community. But more often, they may be seeking to increase their profile or to advertise the goods or services that they provide. In rare cases, they may even be using their money to try to influence the decisions and priorities of the organisations that they sponsor.

Even where this is not the case, the very suggestion that it might be happening is sufficient to cause all kinds of problems, as at least one police force and a well-known university have found out in recent weeks. So before accepting donations or sponsorship, public sector bodies need to make sure that they have considered carefully what funding they are willing to accept and how it will be used.

As a minimum, I would suggest that all public bodies develop and implement:

1. A formal policy on donations and sponsorship, which is approved at the highest level of authority and communicated to all parts of the organisation. This should include both cash and in-kind funding and should set out what contributions may be accepted, the sorts of organisations from which it may be accepted and by whom within the organisation such contributions must be approved.

2. A specific process for approving donations and sponsorship, which should focus on identifying any actual or perceived conflicts of interest that the funding may present. This process should also require an explanation of how the funding will be used and what, if anything, the sponsor will receive in return. All donations and sponsorship should be approved in advance of their acceptance by a designated member of staff.

3. A register of donations and sponsorship, setting out what has been received, from whom it has been received and the purpose for which it has been used. This is essential to ensure transparency and should be a public document.

Donations and sponsorship can provide a valuable source of income in these financially straitened times. But their solicitation and acceptance present a significant risk to organisations that do not have in place suitable arrangements to ensure – and to demonstrate – that their objectivity, integrity and accountability are not compromised. Explore such income streams, but all means, but do so wisely.

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