https://charitycommission.blog.gov.uk/2018/12/06/protecting-your-charity-this-anti-corruption-day-and-beyond/

Protecting your charity this Anti-Corruption Day and beyond

This Sunday (9 December) is International Anti-Corruption Day, a United Nations global campaign to raise awareness of the severity and impact of corruption to social and economic development.

Around $1 trillion is paid in bribes each year and an estimated $2.6 is stolen annually through various forms of corruption – the equivalent to 5% of the global GDP.

No community, region or country is immune to the crimes of corruption despite preconceived conceptions that it may only affect poorer communities.

Without a sustainable long term solution to corruption, communities will continue to be deprived of critical public and social services.

How corruption can affect the charity sector

Many charities working overseas are operating in areas where the need is greatest and it is often in these environments where corruption may be more prevalent.

Illicit financial flows, including bribery and corruption, cost developing countries $1.26 trillion per year, the equivalent of the economies of Switzerland, South Africa and Belgium combined!

When engaging with trustees at our workshops for charities operating internationally in high risk areas, we often discuss the challenges of working in environments where bribery and corruption are seen as a cultural norm.

The bottom line is that it is a criminal offence to offer, promise or give a financial or other advantage to encourage or reward someone for performing their functions improperly under the UK’s Bribery Act 2010.

The Bribery Act has extraterritorial effect, so it is still an offence to make a bribery payment when your charity is working outside of the UK. Bribery can take various forms such as making a facilitation payment to speed up a service.

Be aware, that this is still a bribery payment and an unacceptable use of charity funds.

There is no general exemption in respect of facilitation payments, however the UK government recognises that there might be some circumstances in which payments are made to protect against loss of life, limb or liberty.

If facilitation payments are made to a proscribed group or designated entity, charity trustees will fall foul of counter-terrorism legislation relating to terrorist financing offences.

For further guidance about this topic read the following chapters from our compliance toolkit:

Your responsibilities

 As a trustee you have a legal responsibility to manage your resources responsibly which includes protecting your charity from the risks posed by bribery and corruption.

The potential damage to your charity’s reputation may be severe and could result in a loss of support from donors and affect wider public trust and confidence in charities.

Do not counteract the good work your charity is doing by contributing to crimes of corruption, which fundamentally undermine the socio-economic development of local communities.

How you can protect your charity

You should put in place adequate policies and procedures to protect your charity from bribery and corruption.

The Ministry of Justice sets out 6 principles to inform your actions.

  1. Proportionality: The action you take should be proportionate to the risks you face and the size of your business.
  2. Top level commitment: Those at the top of an organisation are in the best position to ensure their organisation conducts itself without bribery.
  3. Risk assessment: Think about the bribery risks you might face given the specific context of your organisation, its activities and areas of operation.
  4. Due diligence: Knowing exactly who you are dealing with can help to protect your organisation from taking on people who might be less than trustworthy.
  5. Communication: Communicating your policies and procedures to volunteers, staff and partners will enhance awareness and help to deter bribery.
  6. Monitoring and review: The risks you face and the effectiveness of your procedures may change over time.

We also have guidance to help you take action, in particular Chapter 2 of our Compliance Toolkit on due diligence and monitoring.

This chapter includes checklists and logs that you can download to support your monitoring activities.

Taking action when things go wrong

Irrelevant of the circumstance or nature of the payment, if your charity has experienced corruption you should report it to the National Crime Agency.

Reporting these incidents will foster a zero tolerance policy towards corruption within your charity, and provide greater insight to the UK government on the challenges faced by charities on the ground.

 

 

1 comment

  1. Comment by Waltraud Pospischil posted on

    Really appreciate to get such problems covered. We need to make sure that charities are trustworthy and don't let their beneficiaries down.

    Reply

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