Know your donorsand your partners.
Check significant donors, grantees and partners before money moves, watch them after, and keep the written record trustees are expected to keep.
- Low
- Money laundering and terrorist financing risk for charities (NRA 2025)
- Everyone
- Financial sanctions apply to every UK person and charity
- Trustees
- Are responsible for due diligence on donors and partners
What trustees are asked to do, and what we do.
From the Charity Commission’s guidance for trustees, sanctions law and the terrorism laws that apply to everyone.
- 01Charity Commission, toolkit ch. 2
Know your donors
Be reasonably sure who significant donors are and where their money comes from, checking more closely where the risk is higher.
Add a significant donor, a person or a company, and check them against the sanctions and PEP lists. A company comes with its owners. Their ID with a live selfie, by link, through Vouchsafe (on the GOV.UK register of certified services).
- 02Charity Commission, toolkit ch. 2
Know your partners
Confirm a partner’s identity, location and suitability before you fund it, with more checks for larger or riskier partnerships.
A UK partner checked with its directors and owners from Companies House; an overseas partner screened by name against the sanctions lists.
- 03Sanctions rules · Terrorism Act 2000
Don’t fund who you mustn’t
Sanctions law forbids making funds available to a designated person, and terrorism law forbids funding a proscribed organisation. Some regimes allow humanitarian work by exception or licence.
UK, UN, EU and US lists for each donor, partner and the people behind them. You decide each possible match, with a reason.
- 04Charity Commission, toolkit ch. 2
Watch where it goes
Check that funds reach their intended destination and are used as intended, more closely for large sums or high-risk places.
Each checked donor and partner re-screened every morning, and changes at Companies House picked up.
- 05Charity Commission guidance
Report serious incidents
Tell the Charity Commission when someone connected to the charity is put on a terrorist list or under an asset freeze, or about suspected links to a proscribed organisation, fraud or money laundering.
A new possible sanctions match on a watched donor or partner is an alert the next morning, with what to do next.
- 06Charity Commission, toolkit ch. 2
Keep a written record
Keep a written record of your due diligence and its results, and proper financial records with an audit trail for decisions.
Every check, decision and document kept, with an audit trail you can download.
What we check for charities.
Every check in every plan. Yours are lit; pick another industry to compare.
Where the risk is.
The 2025 National Risk Assessment rates the risk for charities as low, for both money laundering and terrorist financing, and higher for charities working in or near conflict zones. It names these weak points.
- Anonymous donations
- Online giving platforms
- Interest-free cash loans from members
- Close links to connected businesses
- School fees paid with criminal funds
- Partners further down the delivery chain
- Work in or near conflict zones
- Cash and informal money transfer
Source: HM Treasury, National Risk Assessment 2025, paragraphs 5.175 to 5.187
Asked by trustees.
Do the Money Laundering Regulations apply to charities?
Not as such: a charity is not covered by them unless it runs a business that is. But trustees must protect the charity’s money, sanctions and terrorism law apply to everyone, and the Charity Commission expects due diligence on donors, partners and beneficiaries.
Can we accept anonymous donations?
Yes. The Charity Commission says knowing your donor does not mean refusing anonymous gifts; look more closely where a gift is large or unusual.
What if a donor or partner is on a sanctions list?
Don’t make funds available to them, freeze anything you hold for them and tell OFSI, then report it to the Charity Commission as a serious incident.
What counts as a serious incident?
Among others: suspected links to a proscribed organisation; someone connected to the charity put on a terrorist list or under an asset freeze; fraud, theft, cyber-crime and money laundering. There is no minimum loss figure.
Do we check overseas partners?
Yes, more carefully where the partnership is larger or riskier. Stratum screens an overseas partner by name against the sanctions lists; Companies House details exist only for UK companies.
Does this apply in Scotland and Northern Ireland?
The Charity Commission’s guidance is for England and Wales; OSCR regulates charities in Scotland and CCNI in Northern Ireland. Sanctions and terrorism law apply across the UK.
Start with your largest donors and partners.
Add them and run their checks: each is then watched every morning, with a reminder to check them again each year.