High-profile scandals that have dominated the airwaves have made one thing clear: ignorance is no longer an excuse. With tainted funds at record highs in Canada (as noted in recent FINTRAC reports) and proposed regulations that could ban cash donations over $10,000, the stakes are high. Add to that the speed of social media scrutiny and the public’s appetite for accountability, and the pressure on boards to ensure their organizations are acting ethically is intense.
This article explores why ethical gift acceptance is now a governance imperative—and how boards, donors, and their advisors can navigate this complex space with confidence, clarity, and integrity.
Every stakeholder connected to your organization brings their own lens, values, and expectations—and when it comes to gift acceptance, where the money comes from matters. Even when funds are directed toward programs that serve communities and create positive impact, the source cannot be ignored. In today’s environment, silence or ignorance isn’t an option. If your stakeholders don’t hear your position from you, they’ll form their own conclusions—often through fragmented information or social media commentary.
The reality is that fraudulent or unethical gift giving is no longer a “highly unlikely” scenario. Levels of fraud, illicit activity, and proceeds of crime flowing through charities and NFPs are at historic highs in Canada, according to the Government of Canada’s 2025 Assessment of Money Laundering and Terrorist Financing Risks in Canada report, also referred to as the National Risk Assessment (NRA 2025). This report identifies “abuse of non-profit organizations” as a funding source used by foreign-based threat groups via methods like crowdfunding, cryptocurrencies, and informal value transfer systems. Add to that the global nature of financial crime and the speed at which reputational damage spreads, and the risk landscape becomes clear: organizations must be proactive.
Understanding your stakeholder ecosystem is critical. It’s broader than just donors and board members. Consider:
Each of these groups will have different perspectives on the story behind the money—and on whether, and how, your organization should accept it. Clear, consistent communication and robust processes are essential to maintain trust and uphold your mission.
Gift acceptance isn’t just about how funds arrive—it’s about understanding their origin. A wire transfer or cheque tells you how the money reached your organization’s bank account, but not how the donor came to control those funds. Were they earned through legitimate business activity? Are they linked to regulatory violations, litigation, or reputational scandals? These questions are no longer optional—they’re essential.
Why? Because the moment your organization accepts a gift, you become connected to its origin story. If that story later surfaces in the media or through regulatory findings, your charity’s reputation and credibility are on the line. We’ve seen this play out globally: high-profile cases like the Sackler family forced major institutions to return millions in donations after public backlash. In Canada, securities regulators regularly publish findings of fraud and misconduct—information that is publicly available and should factor into gift acceptance decisions.
This isn’t about judgment; it’s about due diligence. Boards and leadership teams need the confidence to ask the right questions in a factual, process-driven, and non-confrontational way. Doing so protects your organization, your mission, and the trust of those you serve.
In short, ethical gift acceptance starts with knowing the story behind the money—and having the courage to act on what you learn.
Determining the right level of due diligence is one of the most challenging aspects of ethical gift acceptance. While many organizations use a threshold-based approach, the reality is that qualitative factors often outweigh dollar amounts. A $5,000 donation linked to a high-profile fraud case can pose far greater reputational risk than a $500,000 gift from a well-established, transparent source.
Issues in this space are rarely black and white. They’re subjective, shaped by values, experiences, and public perception. If a situation raises questions—Where did this money come from? Was the donor charged with fraud? Could these funds be connected to illicit activity?—your organization must address it. That means either getting a clear answer (which isn’t always possible) or acknowledging the uncertainty and documenting your decision-making process. Ignoring the question is no longer an option. In today’s environment, “not knowing” is viewed as negligence.
Practical guidance:
Anonymity in charitable giving is often misunderstood—and mishandled. There are two very different scenarios, and boards need to navigate both with confidence.
1. Known donor, anonymous public acknowledgment
A donor presents themselves and their funds but requests that their gift be recognized as “anonymous.” In this case, the organization knows the donor and the source of funds. Due diligence still applies. The anonymity is external, not internal. However, this does not shield the organization from law enforcement investigations, production orders, or civil litigation that could trace the funds back to your charity. From an anti-money laundering (AML) perspective, accepting funds without proper due diligence—even under the guise of anonymity—can inadvertently facilitate the movement of illicit funds.
2. Truly anonymous donor
A donor takes steps to ensure the organization has no knowledge of their identity—for example, donating through a foundation that doesn’t disclose the original source. In this scenario, the organization must shift its due diligence to the intermediary (the foundation) and assess any risk at that level. Blind acceptance is not an option.
Anonymity doesn’t absolve responsibility. Boards must understand that accepting funds without adequate checks can expose the organization to legal, financial, and reputational risk. Increasingly, charities are acknowledging uncertainty around a donor’s source of wealth and making deliberate choices about whether to accept or decline funds. This requires a clear policy, a robust process, and the courage to act in alignment with your mission and values.
Gift acceptance decisions carry risk—financial, legal, and reputational. Boards and leadership teams must understand these risks and manage them proactively.
1. Reputational risk
Your organization’s reputation is its most valuable asset. Accepting funds from questionable sources can erode trust among donors, beneficiaries, employees, and the broader community. In today’s environment of rapid social media amplification, even perceived misalignment with your values can spark public backlash. These are the kinds of decisions that can unite or divide stakeholders—and once trust is broken, it’s hard to rebuild.
2. Stakeholder alignment
Every stakeholder group—board members, donors, volunteers, employees, community partners—brings different values and perspectives. Some may prioritize mission impact, others ethical integrity. Navigating these differences requires clarity and leadership. If decisions are made without transparency or alignment, they can create wedges that damage relationships and weaken support.
3. Compliance risk
Regulatory requirements are tightening. Canada is contemplating new rules that prohibit charities from accepting cash donations over $10,000 and broader restrictions on cash transactions. AML obligations and FINTRAC reporting requirements add another layer of complexity. Non-compliance can lead to penalties, investigations, and reputational harm.
Managing these risks starts with a clear, documented process. Boards should lead this effort, ensuring decisions are consistent, defensible, and aligned with organizational values.
Key elements of a strong approach:
A well-defined approach doesn’t eliminate risk, but it helps ensure your organization navigates this space with confidence and integrity.
While all members of a stakeholder group may not agree on whether to accept funds when questions arise about their source, this diversity of opinion is natural. What matters is creating a transparent process that acknowledges differing views, uncertainty, and the facts so the group can work through the complexity together. In most cases, this approach leads to clarity and consensus on how the funds will be used to advance charitable goals. Sometimes, you have to go through the mud together to reach the other side.
We can help
Our experienced Forensics professionals can work with you to balance the needs of competing stakeholders and establish a foundation for effective risk management when it comes to managing your not-for-profit or charity. Learn more or reach out here.
