Charity & Philanthropy Focus – May 2026

We are pleased to launch Charity and Philanthropy Focus, a new newsletter, sharing practical insights on the issues we see affecting charities, trustees and philanthropic organisations.

We hope you enjoy this first edition and, if a topic raises a question, please do get in touch with your usual Wedlake Bell adviser or any member of our Charities team.

In this issue:

  • Aligning capital with purpose: a practical guide for trustees – trustees face growing pressure to align investments with purpose but are often held back by perceived complexity. We set out a practical approach: moving beyond exclusions, managing trade-offs between returns and purpose, and using the investment policy as a central tool, alongside more engaged use of advisers.
  • Fundraising governance: a compliance journey –  in light of the updated CC20 guidance, trustees have always been responsible for fundraising, but there is now a clearer expectation of active board oversight. We highlight what this means in practice for understanding, monitoring and challenging fundraising to meet legal, ethical and reputational standards.
  • New data protection requirement – are you ready? – from 19 June 2026, organisations must have a clear process for handling complaints about personal data. We explain the key steps: accessible procedures, timely acknowledgement and response, and maintaining audit trails and staff training to demonstrate compliance.
  • Grant making disclosures under SORP 2026: transparency without risk – with SORP 2026 now in force, we outline how charities can approach grant disclosures clearly and proportionately, including flexible presentation, the role of materiality in naming recipients and use of the “serious prejudice” exemption, supported by trustee judgement and proper documentation.
  • ICO publishes “soft opt in” guidance – so what should charities do now? – following the introduction of the “charitable purposes soft opt‑in”, we explain the ICO’s guidance on when it can be used, including what counts as genuine support, limits on third-party data, and the need for clear opt-outs, with practical steps for compliant use.

ICO publishes “soft opt in” guidance – so what should charities do now?

What has changed and why it matters?

The “charitable purposes soft opt‑in” came into force on 5 February 2026 as part of the Data (Use and Access) Act 2025, which amended the rules under the Privacy and Electronic Communications Regulations 2003 (PECR) for direct marketing by electronic mail. In broad terms, the change allows charities (where specific conditions are met) to send direct marketing by electronic mail without prior consent to individuals who have expressed an interest in, or offered to support, the charity’s purposes. The ICO’s guidance is designed to explain how to apply those conditions in practice, and where charities should not rely on the new route. The final guidance was published after a consultation that received more than 140 responses, and includes anonymised examples and additional clarification on areas that charities raised as difficult in practice, particularly direct collections and the role of third parties.

Key messages:

1.Not every interaction with a charity equals “support”

If someone buys something from a charity, that might indicate they’re backing the charitable cause – but sometimes it’s purely a straightforward transaction, with no reasonable basis for assuming that person wants to hear from the charity about fundraising or its wider work. In those cases, the ICO’s steer is that charities should not rely on the charitable soft opt‑in. For charities with trading activity (think shops or ticketed events) the practical takeaway is to draw sensible lines about which types of interactions count as genuine engagement with the charitable purpose, and to be ready to explain, at least internally, why a particular group is eligible to receive messages under the new provision. Strong signals for “support” may include donations, volunteering, signing up for updates about the cause, and requesting information about the charity’s work.

2. Charities remain on the hook for third‑party lists and instigators

The ICO has warned that there is “no such thing” as a soft opt‑in compliant third‑party marketing list for this purpose. So charities cannot assume they can rely on the charitable soft opt‑in if someone else collected the details for them – even where the third-party is another organisation within its wider group.

It is worth remembering that, under the ICO’s broader PECR guidance, responsibility does not just sit with whoever presses send. PECR can catch the organisation that instigates the marketing (for example, where an agency or partner is asked to send messages on the charity’s behalf). In those cases, both parties may bear responsibility and the ICO expects the charity to do some basic due diligence and have a written contract that clearly sets out who is doing what, especially where personal data is involved.

3. Make opt-out easy, and repeat it

Even where a charity can rely on the soft opt‑in, the ICO’s message is familiar: recipients must be given a clear opportunity to opt-out, and that opportunity should be provided in every subsequent communication. In reality, the challenge will typically be operational rather than legal – CRM and campaign tools should record which legal basis is being relied on for each contact, opt-outs should be actioned quickly across channels, and messaging templates should consistently include unsubscribe/STOP options to enable easy opt-out.

So what should charities do now?

  1. Identify which engagements show genuine “support” (vs purely transactional) before relying on charitable soft opt‑in.
  2. Separate contacts being messaged under charitable soft opt‑in vs other routes (such as consent), and make sure the CRM can evidence that split.
  3. Bake in opt‑outs everywhere, including a clear refusal at collection and an easy opt‑out in every subsequent message.
  4. Avoid third‑party lists and don’t assume group-sourced lists are soft opt-in compliant for this purpose.
  5. If anyone else sends on the charity’s behalf, remember PECR can treat the charity as an instigator too – so use written contracts and compliance checks.

In the ICO’s announcement of the guidance, it also reminded charities (separately from marketing rules) that by 19 June 2026 organisations must have a process in place for handling data protection complaints. This is not limited to marketing, but it is relevant to supporter communications and trust. See further details in our article here.

Grant making disclosures under SORP 2026: transparency without risk

The good news? The SORP continues to allow flexibility and recognises that full public disclosure isn’t always the right answer.

Telling the story

SORP 2026 expects trustees to explain grant making clearly in the trustees’ annual report and in the notes to the accounts, and in a way that helps readers understand what the charity funds, why those grants are made, and how charitable resources are being used. There’s no single correct format. Grants can be presented by theme, programme, geography or activity, so long as the picture is clear. For many charities, especially those working internationally or across multiple programmes, this approach can be far more meaningful than a long list of recipients.

Naming grant recipients

Charities do not necessarily need to name every grant recipient. Where grants are made to organisations, trustees must consider materiality. If the total funding given to a particular organisation is material in the context of overall charitable expenditure, the default position is that it would usually be identified in the accounts. Where grants are not material at that level, the SORP allows a more aggregated approach provided the disclosure still explains the nature and purpose of the activity.

The “serious prejudice” exemption

SORP 2026 also recognises that disclosure can create real risks. Where naming a grant recipient could reasonably be expected to cause serious prejudice to the charity, the recipient organisation, or individuals connected with it, trustees may withhold identifying information. This is particularly relevant for grants to individuals and grants made in high‑risk or politically sensitive contexts, where public identification could expose people to harm or intimidation.

Importantly, this isn’t a blanket non‑disclosure. Even where identities are withheld, charities must still disclose, in aggregate, the number, total value and general purpose of the grants, and explain that the serious prejudice exemption has been applied.

Trustees approach to disclosure in the annual report

Trustees are expected to exercise judgement and to do so carefully. In practice, this means:

  • Making a clear trustee decision about the disclosure approach.
  • Assessing both materiality and risk (not convenience).
  • Documenting the rationale.
  • Retaining full grant information internally for audit and regulatory purposes.

SORP 2026 places clear weight on the exercise of trustee judgement. Decisions to reduce or aggregate disclosure should be taken consciously and for proper reasons. Where trustees rely on the serious prejudice exemption, they should be able to explain by reference to objective factors why public disclosure would not be appropriate in the circumstances.

The key takeaway

SORP 2026 does not force charities to choose between transparency and safety. It allows trustees to be open about how funds are used, while also protecting beneficiaries, partners and the charity itself where there are genuine risks.

For grant making charities, reviewing disclosure practices now, and ensuring trustee decisions are well reasoned and well recorded, is an important part of getting ready for the year ahead.

Fundraising governance: a compliance journey

At one level, nothing has changed. Trustees have always been responsible for their charity’s fundraising. But in another sense, this update reflects a continued shift towards clearer expectations of active board oversight.

To understand why this matters, it helps to look back.

The fundraising controversies of around 2015 marked a defining moment for charity governance. The tragic case of Olive Cooke prompted widespread public concern and political scrutiny. The issue was debated in Parliament and addressed directly by Prime Minister David Cameron. Subsequent investigations revealed extensive use of donor lists, wealth screening and data matching, often without donors fully understanding how their personal information was being used.

The Information Commissioner’s Office imposed fines on several household name charities including the British Heart Foundation, Cancer Research UK and the RSPCA for breaches of data protection law. For many organisations, this served as a clear reminder that fundraising activity, however operational in nature, sits firmly within the trustees’ governance remit.

The regulatory response was significant. The Etherington Review led to the creation of the Fundraising Regulator and a strengthened Code of Fundraising Practice. The Charity Commission reinforced its guidance to trustees and made clear that fundraising is not simply a management function. It is a core governance responsibility.

It is sometimes asked why both the Charity Commission and the Fundraising Regulator have roles in this area. Their functions are complementary. The Fundraising Regulator oversees how fundraising is carried out and sets the standards expected of fundraisers. The Charity Commission regulates trustees. It expects boards to understand how fundraising is conducted, oversee the risks, and ensure that activity carried out in the charity’s name meets legal and ethical standards. One regulates the activity. The other regulates those ultimately accountable for it.

Subsequent governance failures at major charities such as Oxfam and Kids Company reinforced the importance of board visibility over risk culture and operational practice. At the same time, fundraising has become more complex, involving digital campaigns data driven targeting and commercial partnerships, increasing both opportunity and risk.

The updated CC20 guidance reflects this evolution. It does not change the underlying legal duties of trustees. Instead, it clarifies the practical expectations. Trustees should understand how fundraising is conducted, ensure appropriate reporting and oversight, consider fundraising within the charity’s risk framework and satisfy themselves that fundraising practices align with the charity’s values and reputation. This aligns closely with the Charity Governance Code, particularly its emphasis on integrity decision making and effective risk and control as core board responsibilities.

For many charities, this will already reflect established practice. But the direction of travel is clear. The guidance provides a clearer framework against which trustee stewardship will be assessed by regulators stakeholders and ultimately the public.

The sector has travelled a considerable distance over the past decade. The result is greater clarity stronger governance expectations and a more explicit recognition that fundraising is not simply about income generation but about maintaining trust in the charity itself.

Aligning capital with purpose: a practical guide for trustees

Moving beyond “What to avoid”

For many charities, the starting point has been to avoid certain types of investments. That remains relevant, but it is only one part of the picture. Trustees are now being asked a broader question: not just what should we avoid, but how do our investments sit alongside what we are trying to achieve as a charity?

This does not mean every investment needs to directly advance the mission. Rather, it means being able to explain, in clear terms, how the charity’s money is being used and why that is appropriate in light of its purposes. For some organisations this will involve modest adjustments. For others it may lead to more fundamental change. Both approaches are valid, provided they are properly thought through.

Accepting, and managing, trade-offs

A common concern is that aligning investments with purpose will come at the expense of financial returns. In practice, the position is more nuanced. Trustees are not expected to prioritise mission at all costs, nor to ignore it entirely.

What is expected is that trustees actively consider where tensions arise and make informed decisions. In some cases, that may mean accepting a degree of compromise. In others, it may not. The key is that decisions are deliberate, documented and capable of explanation. This is less about finding a perfect answer and more about demonstrating a sound decision-making process.

Start with the investment policy

If the topic feels overwhelming, the most effective place to focus is the investment policy. This is the document that sets out how the charity approaches investment and provides the framework for decisions.

A good investment policy should:

    • Explain how the charity’s purposes are taken into account.
    • Set out any areas of concern or restriction.
    • Give clear instructions to investment managers.
    • establish how decisions will be reviewed over time

Many charities find that their existing policy has evolved piecemeal and no longer reflects how they actually think about these issues. A periodic reset, taking a step back and asking “what are we trying to achieve here?”, is often more effective than incremental amendments.

Bringing the right voices into the room

Investment decisions are often seen as the domain of a finance or investment committee. While that remains important, there is increasing value in involving a wider group.

Programme teams can provide insight into the charity’s work on the ground. Fundraising teams may have a view on donor expectations. In some cases, it may even be appropriate to hear from beneficiaries or partners. This does not mean expanding decision-making to an unmanageable degree, but it does mean recognising that investment decisions sit within the broader life of the organisation.

Asking better questions of advisers and managers

Trustees are not expected to become investment experts. However, they are expected to ask the right questions of those advising them. Rather than relying on broad assurances, it is helpful to probe a little further:

    • How are decisions about responsible investment actually made?
    • What does engagement with companies look like in practice?
    • How are difficult areas, such as controversial sectors, handled?

The aim is not to catch advisers out, but to build a clearer picture of how the charity’s expectations are being implemented.

Cutting through the language

One of the main barriers in this area is terminology. Phrases such as responsible investment, ESG and impact investing are widely used but not always clearly defined.

Trustees do not need to master every term. What matters is agreeing, at board level, what these concepts mean for the charity. For example:

    • What level of alignment are we aiming for?
    • Are we seeking to avoid harm, to influence behaviour, or to achieve measurable impact?

Having a shared understanding makes it much easier to make consistent decisions.

Recognising new and emerging risks

Trustees are also operating in a changing environment. Issues such as climate change, environmental degradation and geopolitical instability are increasingly relevant to investment decisions.

These factors are not simply ethical considerations. They can affect financial performance and the long-term sustainability of investments. Trustees should therefore be comfortable asking how these risks are being considered and managed, without feeling the need to become specialists in the underlying detail.

From avoidance to influence

There is a growing recognition that charities are not limited to choosing where not to invest. They can also use their position as investors to influence behaviour.

This might involve supporting investment managers who actively engage with companies, or being part of wider initiatives that encourage better standards. While not every charity will take the same approach, it is helpful to understand that influence is an available tool.

A practical way forward

For trustees approaching this area, a structured but proportionate approach is often the most effective:

    • Revisit the investment policy with purpose in mind.
    • Identify any areas of clear concern or uncertainty.
    • Engage with advisers to understand how those issues are handled.
    • Document decisions and the reasoning behind them.
    • Keep the position under periodic review.

This is not about solving everything at once. It is about building confidence and clarity over time.

Conclusion

Aligning investments with purpose is no longer an optional extra. It is part of good governance. While the subject can appear complex, the underlying task is familiar: to make informed, balanced decisions in the best interests of the charity.

With a clear framework and a willingness to engage with the issues, trustees can move forward with confidence, ensuring that their charity’s assets are managed in a way that is both financially responsible and true to its purpose.