REFUNDING DONATIONS

Dig Deep is committed to our charity objective of providing water, sanitation and training to communities in rural Kenya. We are fortunate to be supported by a range of supporters who fundraise for us through a variety of means. 

 

Once funds are received by the charity, we seek to put it to work as soon as possible and work to ensure that we have the greatest impact possible with the funds that are gifted to us. 

 

We recognize that on occasion a donor may change their mind about their donation to Dig Deep, and request a refund for this. 

 

Unfortunately, other than in a few specific circumstances (for example, where a donation was fraudulently made, or where a refund is requested within 7 days of receipt), The Charity Acts (1992 and 2011) and professional fundraising bodies (the Institute of Fundraising and the Fundraising Regulator) make it clear that it is not possible for Dig Deep to refund donations. This is the case both for unsolicited donations, and those made in relation to one of our fundraisers taking part in a charity overseas challenge. 

 

The full reason for this (and references to the specific sections of charity law and guidelines to which we refer) is outlined in detail below. 

 

In summary, it is because legally, once a donation has been received by a charity, they are to be considered charity funds. The law requires charities to use charity funds only to further the purposes of the charity, as outlined in the charity's governing document. 

 

To refund a donation would, therefore, count as making a payment to a donor, which would not fall under our charitable aims, and would not be in the interests of our beneficiaries in Kenya. As a result, to do so would go against our legal and moral obligations. 

 

We hope that the information below helps highlight the reasons and legal guidelines that have led to this position.


The Institute of Fundraising’s Code of Practice, of which we are a signatory, states that we must not return donations unless they meet specific criteria that are listed in the section below. Section 1.7 reads: 

 

"Fundraising organisations which are charities MUST* not return donations unless certain criteria are fulfilled…. It may not be lawful to return a donation and fundraisers MUST take advice from legal advisers or the Charity Commission / OSCR before doing so.”

Taken from the Institute of Fundraising Code of Fundraising Practice, Section 1.7 

 

Dig Deep have taken legal advice and spoken to the Institute of Fundraising, Charity Commission and Fundraising Standards Board in developing this position, who have confirmed that the below policy is correct. 

 

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Situations where we would be able to refund a donation
 

There are a few circumstances in which we would be able to refund donations. If a donor feels that any of their donations fall into one of the below four categories, they should let us know as soon as possible.

 

  1. If the donation was fraudulently made. If a donor believes that a donation was fraudulently made (ie. without  the   account holder's knowledge or permission), please let us know. 

  2. Where the donor lacked the capacity to make a decision to donate, in which case the donation should not have been accepted in the first place. Dig Deep are careful to ensure that our fundraising is ethical and ensure that we and our fundraisers are not exploiting those that are vulnerable or coercing those that lack the capacity to raise funds. 

  3. In the instance of a ‘failed appeal’. A failed appeal is a situation where a charity requested donations for a specific item or project in the field, and as a result of not raising enough money, the item/ project cannot go ahead, and so those funds that have been donated should be returned. Dig Deep does not run appeals of this kind. All of the fundraising we do from the public, including our charity challenges, are not for a restricted area of our work and are considered to be an ongoing work of the charity. In the case of our overseas challenges, this is made clear to our fundraiser in the terms and conditions that they have signed.  More information on this can be found in Section 65 of the Charities Act 2011 and Section 63 of the Charities Act 2011.  

  4. Where a refund request is made within 7 days of a donation of more than £100 being made. Where donations of more than £100 are made by credit/ debit card, the donor is entitled to a ‘cooling off’ period of 7 days, and we will refund donations if we are asked to do so within this time period.  (Please see the 1999 amendment to Section 61 of the Charities Act 1992 for more information)

 

You can read more about these specific exclusions using the below links:

 

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Further information on why we are unable to make a payment to a donor once the funds have been received

 

Unless we are legally obligated to refund a donation to the donor (where a donation meets one of the criteria listed above), the money that has been donated to Dig Deep is now considered to be charity funds, and so legally it would no longer be considered a ‘refund’, but a payment to an individual from the charity. 

 

The law has strict requirements on how charities are able to use their funds. A charity’s funds and property can only be used to further the purposes of the charity, and in ways which are laid down or permitted by the charity’s governing document. 

 

Dig Deep’s charitable purposes are as follows: 

 

To promote sustainable development in East Africa by:

  1. The relief of poverty and the improvement of the conditions of life in socially and economically disadvantaged communities

  2. The preservation, conservation and the protection of the environment and the prudent use of resources

  3. The promotion of sustainable means of achieving economic growth and regeneration. 

As taken from the Charity Commission records

 

Because Dig Deep is legally entitled to retain these funds, we are legally obliged to apply the charities funds only in the furtherance of the purposes listed above. 

 

Making a payment to an individual would not meet these criteria, and indeed to do so would be to disadvantage our beneficiaries who would otherwise have benefited from these funds. 

 

With this in mind, under charity law, we are only able to make a payment (known in charity law as an ‘ex gratia’ payment) to an individual if:


1. There is a legal obligation to make the payment. 

Please see the 4 criteria listed above that show the legal circumstances in which we would need to refund a donation.


2. Where the payment would be in the interests of the charity, and further its charitable aims. 

As outlined above, our interests are to spend funds to further our work providing water and sanitation to communities in Kenya. This payment would not further those aims. The Charity Commission says in it’s CC7 Guidance the following: "Trustees should bear in mind that any money or property of the charity used to make an ex gratia payment will no longer be available for the charity’s purposes. The charity’s beneficiaries will thus be disadvantaged by the trustees’ decision to make the ex gratia payment.”


3.Where the Trustees believe they are under a moral obligation to make the payment, and are able to convince the commission that this is the case. 

The Charity Commission says in its CC7 Guidance the following:

“In a court case decided in 1969 (In Re Snowden Dec’d [1970] 1 Ch 700; [1969] 3 WLR 273; [1969] 3 All ER 208) the judge said that the power to authorise an ex gratia payment was “… not to be exercised lightly or on slender grounds but only in cases where it can be fairly said that if the charity were an individual it would be morally wrong of him to refuse to make the payment.” The commission will apply that test in considering whether or not to authorise a payment. Trustees must be able to convince the commission that there are reasonable grounds for them to believe they would be acting immorally by refusing to make the payment.”

 

Examples provided by the charity commission of where there would be a moral imperative to return a donation mostly refer to legacy payments where a donation made in a Will differs legally from what a charity believe was intended. For example where a charity receives a larger gift than the testator really intended because of a legal technicality or an oversight on the testator’s part. As a result, some other person or persons will be deprived of money or property which the testator intended that person to receive. 

 

The only non-will related circumstance that the Charity Commission provides is where a person has made a gift to a charity reasonably but mistakenly believing that his or her personal circumstances allowed for the making of a gift of that size at that time. If it later became clear that the donor’s generosity to the charity had reduced the donor to poverty, the charity trustees might feel morally obliged to make an ex gratia payment by returning all or part of the gift. 

 

Considering the above guidance, unless evidence is given of situations similar or equivalent to those above, we are unlikely to consider that our moral responsibility to the donor exceeds our moral responsibility to our beneficiaries, and therefore we are not legally required to permit a payment. If however, a donor believes that they have grounds to be considered under this 'moral obligation' they should present this to the Trustees in writing for their consideration.

 

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Information given to fundraisers when signing up to take part in an overseas challenge event

 

We recognize that signing up to take part in one of our overseas challenges, is both a wonderful and generous act, but also a significant responsibility. We work closely with all of the participants to support their fundraising, and help them meet their fundraising commitment to the charity. 

 

When fundraisers sign up to take part in one of our events, they must sign our Terms and Conditions. The relevant parts of these Terms and Conditions are as follows:

 

  • 3.2 Should the participant, for whatever reason, not take part in their chosen event, all monies collected should be forwarded to Dig Deep Challenges Ltd. or returned to donors. Any money already submitted to Dig Deep Challenges Ltd. prior to the decision is not refundable and is considered to be a gift made to the Charity, unless it was specified as a contribution towards the costs of the trip when the payment was made. 

  • 8.4 Participants must be aware that the charity is bound by UK charity law to safeguard funds once donated to the charity. All donations in relation to fundraising targets are therefore ineligible for refunds even if the fundraiser does not participate in the event.

  • 8.5 All participants agree to make donors aware that they are making an irrevocable gift to the charity when soliciting donations.

 

Participants are unable to register for our events without ticking to say that they have read the Terms and Conditions in full and agree to them. We do our best to reiterate this information to the participants as appropriate and remind fundraisers to refer back to their terms and conditions. 

 

We recognize that not all participants will pass this information on to donors when soliciting donations, and so we also reiterate this in our publically available information. 

 

We are consistent in our publicity and charity fundraising materials (eg. on our sponsorship forms and online fundraising platforms) that donations made will support the work of Dig Deep, and as such, that no restrictions are placed upon it. 

 

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Making a restriction or condition onto your donation

 

Funds are most useful to Dig Deep when they are unrestricted, allowing us to act with agility and best meet the needs of our beneficiaries. Furthermore, restricted funds require additional time in banking and reporting, and will only be accepted where it meets our charitable priorities.  

 

Some donors (normally giving sums of over £5000) do wish to restrict their donation to a specific area of our work. This is normally to a specific programmatic area, such as the construction of a rainwater harvesting system, or the delivery of a course of training. Where this is the case, we discuss this carefully with the donor to understand their motivation and wishes, and where it is compatible with our programmatic priorities, the donation is earmarked for that restricted area as we bank it, and is spent, and reported back on accordingly.

 

Unless an explicit restriction or condition has been communicated with us at the time of the donation, we presume that the donation is for the general charitable work of the charity, and will be spent by us accordingly. 

 

We would not normally agree to a restriction to explicitly support one of the costs associated with our overseas challenge fundraising programme. However, we would discuss this with the donor at the time of making the donation. It is unlikely that we would agree to a donation that is dependent on the completion of a trek by a named participant.   

 

We are consistent in our publicity and charity fundraising materials (eg. Sponsorship forms and online fundraising platforms) that donations made will support the work of Dig Deep, and as such, that no restrictions are placed upon it. 

 

On the rare occasion that we solicit funds for a specific area of work (for example, toilet construction), we are clear about this in publicity and marketing. 


Unless a restriction is made by Dig Deep or a restriction agreed with us at the time of making the donation, we are legally unable to refund the donation, as per Section 15.2.8(a) of the Institute of Fundraising Code states the following:

 

If sponsorship money is given without conditions it automatically belongs to the relevant charity regardless of whether or not an activity is completed.”


What to do if you are unhappy and would like to discuss it further

 

We hope that this adequately explains our position on refunding donations and the reasons for this. We assure you that we have not come to this position lightly, and indeed, consider that this is the only position available to us under Charity Law. 

 

If you would like to raise a formal objection, you can do so by writing to Ben Skelton, Director of Dig Deep, or to our Chair of Trustees. Contact details can be found on the Contact Us page. 

 

If you are dissatisfied or would like further clarification about the legal guidelines that charities must observe we refer you to the following organizations:

 

  • The Charity Commission

  • The Institute of Fundraising Code of Practice

  • The Fundraising Regulator
     

 

 

 

 Registered Charity No. 1148745 

Dig Deep (Africa)

346 Glossop Rd, Sheffield,

S10 2HW

Email: info@digdeep.org.uk

Tel: +44 (0) 114 360 1471 /

+44 (0) 7366 142 807

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