Successful applicants must be … Natural born British Subjects born within Great Britain, Northern Ireland, the Channel Islands or the Isle of Man of parents both of whom are or were British Subjects born within the British Isles and neither of whose parents was or is of colonial or overseas original subsequent to the year 1900 (Section 34 of the Race Relations Act applies).
(The relevant legislation reminds us that since these provisions do not make reference to race/colour, they can be followed in full).
I suppose Mrs Downes was entitled to place whatever restrictions she wished on how her own money was to be spent. But it is clear she had a very narrow conception of what it means to be British, and the criteria leave a horrible taste in the modern mouth. It is odd that the BBC should be endorsing this sort of anacronism.