I assume that you refer to the PC supporting fundraising in the community. PC's can make donations to groups etc in the community which broadly speaking meet the basic criteria of benefiting the community in some way. To ensure that they stay within the "rules" it is advisable for the PC to have in place a donations policy which they must decide. It would specify how and who can apply, amounts ( say max) that will be donated, and have an appointed committee to examine applications and make recommendations to council for decisions. This will streamline the process, and ensure compliance with any requirements laid down ( including proof of where the grant has gone) in the policy.
If the donation is for something outside the community ( even a charity) then it would be hard to justify sending tax payers money without a community consultation on it no matter how deserving the cause is.
PC's must show due diligence in all they do.