Donor and partner screening

Your charity may wish to ensure that the companies you work with do not pose a significant risk to your reputation or conflict with your objectives. Developing a policy that guides which companies you are willing to accept funding from, partner with or buy services from can be useful.

In this section

Why screen donors, suppliers and partners?
Developing a policy
Further information

Your charity may wish to consider social, environmental and ethical issues when deciding which companies to work with, as well as which to invest in. This could include corporate donors, partners and suppliers.

If your charity already has a responsible investment policy you may wish to develop this to cover all areas of work with companies, ensuring that your activities are ethically consistent throughout your organisation.

The issues covered in this section are relevant to all charities, not only those with investments.

Why screen donors, suppliers and partners?

The most significant factor for charities entering fundraising or partnership agreements with companies is the potential risk to your reputation. The reasons for investing responsibly outlined in why do it also apply to purchasing, fundraising and partnership approaches.

Charities are coming under increasing pressure from stakeholders and media scrutiny to behave ethically and carefully select the companies they work with or buy from. Reputation risk is an area of concern for charities, whose name and brand is a valuable asset.

Increasing numbers of consumers are avoiding companies on ethical grounds, and some charities are concerned that they may also lose public support if they are linked to such companies.

Forming a commercial partnership with a company, such as for fundraising activities, can be a higher profile relationship than buying shares in the company, and so the potential reputation risks can be greater.

The Charity Commission states, “A successful partnership can raise both a charity’s income and profile. An unsuccessful one, where stakeholders perceive the charity to have "sold out", can damage income and profile. “

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Developing a policy

The Charity Commission conducted a study of Charities and Commercial Partners, which stated that, “Charities should consider establishing an ethical policy which clearly sets out the charity’s values…..Against the framework of their ethical policy, charities need to carefully consider whether a proposed commercial partnership is appropriate and in the best interests of the charity.”

It is important to consider the development of an ethical partnerships and procurement policy which sets out your:

  • ethical commitments
  • social, environmental and ethical criteria
  • approach to positive screening, negative screening or engaging with companies
  • process for making decisions

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Further information

Corporate Critic is a product of the Ethical Consumer Research Association. It indexes and rates the Corporate Social Responsibility records of over 50,000 companies, using primarily civil society data. It also provides a template for an ethical sponsorships policy.

Ethical Investment Research Services (EIRIS) Limited researches over 2,800 companies globally. Coverage spans 40 different areas including traditional "sins (alcohol, tobacco, pornography etc.), environmental performance, human rights and many other areas. EIRIS works with charities to translate their core mission into a meaningful, detailed policy to be used in the filtering of the investable universe. This enables charities to find out if companies are ‘acceptable’ according to their own specific ethical criteria. Further to this, charities can look at company reports and sector reports either as an investment tool or when assessing partnerships and donations.

The Charity Investment Ethics Database from Ethical Screening gives charities and not-for-profit organisations basic information on the ethical issues affecting the UK's top 350 companies. This free of charge service aims to increase awareness of ethical investment within the not-for-profit sector; and enable registered users to harmonise their investment policies and portfolios with their charitable aims and objectives.

The Institute of Fundraising’s Code of Fundraising Practice includes a section for charities working with business.

 

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