The Donor Nobody Checked: Sanctions Gaps in Britain's Charity Fundraising

Britain's charities are built on a simple proposition: that money given in good faith will be used for good purposes. That proposition is also their principal vulnerability. In 2026, the sector raises and moves money across borders through emergency appeals, institutional grants and local partner organisations. Yet many charities still treat sanctions screening as a governance formality — a check on trustees at appointment, a declaration in an annual return, and little more.

The result is a gap between the sanctions list and the fundraising file. The gap is not usually deliberate. It is the product of a low-risk self-image, limited resources and a misreading of where sanctions risk actually sits. Sanctions obligations are not confined to banks, law firms and estate agents. They attach to all persons in the UK, and to UK persons operating abroad. A charity that accepts a donation, pays a partner or funds a programme is within scope of those obligations whether or not it considers itself part of the regulated financial sector.

The Trustee File Is Not the Whole Picture

Charity sanctions screening has a familiar shape. Trustees are checked at appointment. Senior staff may be checked at recruitment. The annual return records that the charity has considered its obligations. These are sensible steps, but they answer a narrow question: whether the people who govern the charity are designated. They do not answer the harder question: whether the money the charity receives, or the organisations it pays, are connected to sanctioned persons or prohibited activity.

Donors are the obvious blind spot. A single major gift can dwarf a charity's routine income, and an emergency appeal can attract donations from individuals and intermediaries whose identities are never tested against the consolidated list. Smaller donations collected through platforms, collection tins and sponsored events are lower risk in isolation, but they are not risk-free in aggregate. The charity may never know the name of the person behind a transfer, particularly where a payment is routed through a payment processor or a donor-advised fund.

Partner organisations are the second blind spot. UK charities increasingly deliver programmes through local partners in higher-risk jurisdictions. Those partners may have their own trustees, staff, contractors and sub-grantees. Screening the UK charity's board does not screen that chain. A sanctions exposure can enter through a partner's bank account, a supplier or a sub-grantee long after the original grant agreement was signed.

Where the Charity Commission's Guidance Stops

The Charity Commission's guidance is principles-based, and deliberately so. It expects charities to understand their risks, to have proportionate controls and to be able to explain their decisions. That flexibility is appropriate for a sector that ranges from small almshouses to multimillion-pound international NGOs. But principles-based guidance can be read as permission to do less than the risk requires.

A charity may conclude that its sanctions risk is low because it has no obvious link to a designated country or person. That conclusion is often reasonable on its face. It becomes unsafe when it is not revisited. Sanctions designations change frequently. A partner that was unproblematic at appointment may later be connected to a designated individual. A donor who gave before a designation may give again afterwards. A grant chain may be restructured without the UK charity being told.

The Commission can ask questions and can take regulatory action where it sees misconduct or mismanagement. It is not, however, the UK's sanctions enforcement authority. That role sits with the Office of Financial Sanctions Implementation at HM Treasury. The distinction matters. A charity can satisfy the Commission's governance expectations and still fail to meet its sanctions obligations. The Commission's guidance is not a safe harbour from OFSI.

The Emergency Appeal as a Screening Stress Test

Emergency appeals expose the weakness most clearly. They are designed to move quickly, often through digital platforms and media partners, and they attract donors who have no prior relationship with the charity. Speed is part of their value. It is also part of their risk.

A charity that would ordinarily take weeks to complete due diligence on a major donor may accept an emergency gift within hours. A partner organisation may be selected because it is already on the ground, not because it has been recently screened. The charity's focus is on delivering aid, which is understandable. But sanctions compliance does not pause during a humanitarian crisis.

OFSI has published guidance for charities and other organisations operating in high-risk environments. It recognises that humanitarian activity can be particularly difficult, and it allows for reasonable and proportionate approaches. That flexibility is not an exemption. It requires a documented assessment of the risk, a clear record of the decisions taken and an ability to show why a particular payment or partnership was considered acceptable. A promise of good faith, recorded in a board minute, is not the same as a paper trail.

Grant Chains and Partner Organisations

The grant chain is where sanctions risk becomes most diffuse. A UK foundation may make a grant to an intermediary, which then makes sub-grants to local organisations. Each layer adds distance between the original funder and the ultimate recipient. Each layer also adds a point at which screening can be skipped.

Good practice does not require a charity to screen every individual beneficiary of every programme. It does require the charity to understand the chain, to identify the entities that receive funds and to have a mechanism for checking them against the consolidated list. Where the chain is long or opaque, the charity should be able to explain why it is comfortable with the residual risk and what it would do if a designation occurred.

That explanation is increasingly important in 2026. Sanctions regimes have expanded, designation criteria have broadened and the volume of listings has grown. The charity sector's low-risk self-image has not kept pace with that change. The risk is not that every charity is handling sanctioned money. The risk is that a small number of charities are handling it without knowing, and that their governance files would not show how they tried to find out.

What a Paper Trail Looks Like

A defensible charity sanctions programme does not need to be elaborate. It needs to be documented. It should record which donors, partners and grant recipients are screened, against which lists, at what frequency and with what result. It should set out how the charity responds to a potential match, who makes the decision and how that decision is recorded. It should cover emergency appeals as well as routine fundraising.

Most importantly, it should be reviewed. A screening programme that was adequate in 2020 may not be adequate in 2026. Designations change, payment methods change and partner networks change. The charity that can show a current, risk-based and evidenced approach is in a far stronger position than one that can only show a signed declaration.

OFSI enforcement against charities has not been the headline story of the UK sanctions regime. That is not the same as immunity. The sector's exposure is real, and it sits in the ordinary places: the donor who gave without a name, the partner who was never rechecked, the emergency appeal that moved too quickly to ask. In 2026, charity sanctions compliance needs a paper trail, not just a promise.