Ex Gratia Payments Explained: A Guide For Charities In England And Wales

An ex gratia payment can be made by a charity when it considers that, 'in all the circumstances', its 'trustees could reasonably be regarded as being under a moral obligation to make' that payment.

It is a payment that the charity:

• is not under any legal obligation to make; 

• does not otherwise have any power to make; and

• cannot justify as being in the best interests of the charity.

The Charity Commission's 27 November 2025 guidance explains 'the basis for making a moral payment is that the charity has been ‘unjustly enriched'.' It is made when 'it can be fairly said that if the charity were an individual it would be morally wrong of him to refuse to make the payment' (Re Snowden (1970)).

Alongside the changes brought in by sections 15 and 16 of the Charities Act 2022 the Charity Commission released  updated guidance, including specific guidance 'for will or legacy cases', and new case studies illustrating when a moral obligation might exist.

Unless the payment falls within the section 15 exception for small payments, any payment will require Charity Commission approval.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.