Ex gratia payment

Ex gratia means “as a favour”. An ex gratia payment is one a charity has no legal duty or power to make, but which the trustees feel is the morally right thing to do. The textbook case is a legacy: someone leaves money to a charity, plainly intended to change their will, and dies first — and the trustees feel bound to return it to the family.

Since 27 November 2025, the Charities Act 2022 lets trustees authorise small ex gratia payments themselves, without the Charity Commission’s consent, up to a maximum set by the charity’s income. (Source: GOV.UK, Ex gratia payments by charities (CC7); Charity Commission, 27 November 2025, accessed 9 July 2026.) Trustees must apply an objective test of moral obligation, and can delegate the decision while remaining responsible for it.

Payments above the income-based limit still need Commission authority. Record the reasoning carefully, and treat any personal connection between a trustee and the recipient as a conflict of interest — see the trustee duties entry and the Trustee & Governance Handbook.