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Disputed Legacies and Compliance


With all the fundraising regulatory changes this year and the increased focus on compliance, charities are rightly thinking about the legal use of data, including how long they should keep donor’s details on file, especially in relation to “lapsed” donors.

The Information Commissioner suggests that you need a good reason to hold on to old data and that charities should review what they keep and for how long, to ensure it is not “excessive”.

Of course, direct marketers have long argued for the need to keep basic data on former supporters for longer periods (including those who have asked for their details to be deleted), so that they do not mail people who no longer want any contact (for example, by renting fresh data). This is a familiar line.

However, at the recent IoF Legacy Conference, Paul Hewitt of Withers LLP solicitors made a further (and to my mind very compelling) argument for keeping data for longer periods. This was in connection with disputed wills (which may be about to increase in number, depending on the outcome early next year of Ilott v Mitson).

In short, recent case law has more often found in favour of a charity, when a legacy has been challenged by a relative, where the charity could show that the legacy it has received was the result of a long-term relationship with the supporter and that it relied on such gifts, rather than the gift being a sudden windfall. In other words, the charities needed to show where possible that they knew the supporter and had had a longstanding supporter relationship with them. Hewitt suggests this makes the charity’s case stronger to resist claims from relatives under the Inheritance Act 1975.

The implication for data handling is therefore that this is a strong argument in favour of keeping basic data on supporters long-term, even if they have not donated for some years and might normally be seen as “lapsed”. The point was made at the conference that such a donor might still think of themselves as a supporter but might now be in a nursing home and not in a position to support again until their legacy is received.

As the Charity Commission is keen to underscore, charities have a duty to protect their assets. One way of doing this is to maintain records of donors for some years after they stop giving. What is not clear, however, is how long a charity is justified in doing this for. This is another example of how compliance regulations can conflict with other areas of law. The best advice seems to be to develop a policy on data retention that will provide enough information on past donors to prove the relationship and can be justified, but which would not be enough to land the charity in hot water with the ICO.

This is, of course, a personal view and charities concerned about the legal position of their data retention should consult their legal advisers.

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