3.Processing donations
This section includes standards that relate to handling different types of payment (including one-off payments and ongoing donation commitments) to make sure donations are kept safe. It also includes information on Gift Aid.
3.1 Cash
In this section, ‘you’ means a charitable institution or third-party fundraiser.
You must have procedures for counting, recording and banking donations without delay. The procedures must outline who does what, and when and how this will be monitored. The procedures must make sure that:
- unsecured cash is not left unattended;
- cash is banked as soon as possible;
- cash is kept in a safe or other secure place until it is banked;
- cash is counted and recorded in a secure place by two unrelated people, if possible; and
- cash you have banked matches your income summaries (if possible, this should be checked by someone who was not involved in counting or cashing up the money).
Professional fundraisers and commercial participators (and people fundraising for them) are legally forbidden from taking any money from the cash they receive.
You must make sure cash donations are accounted for appropriately. This includes:
- making sure third-party fundraisers do not take any expenses or fees from donated cash, unless these were agreed before the fundraising activity.
Gift Aid allows registered charities to reclaim tax on donations made by UK taxpayers. This effectively increases the amount of the donation. HM Revenue & Customs (HMRC) is the lead statutory body for all matters relating to tax, including Gift Aid.
If you want to claim Gift Aid, you must:
- only claim Gift Aid or claim tax relief under the Gift Aid Small Donations Scheme if all the conditions are met and you are eligible to claim it; and
- keep up to date with guidance from HMRC on how the tax system works, including its guidance on Claiming Gift Aid, Benefits received by donors and connected persons and the Gift Aid Small Donations Scheme.
Cash collecting boxes
You must make sure the charitable institution is sent the full amount from all sealed collection boxes without any expenses or fees being taken, unless it has been agreed beforehand that these can be taken.
In Scotland, fundraisers can deduct their fees and expenses from collecting boxes before paying the remaining amount to the charitable institution, in line with regulation 11(3)(d) of The Public Charitable Collections (Scotland) Regulations 1984.
You must make sure that all sealed collection boxes are labelled, numbered and sealed.
Receipts
You must provide a digital or handwritten signed receipt for cash collection donations which were not made using a sealed collection box.
You must give fundraisers a receipt when they return sealed collection boxes.
You must give a receipt to the person who owns or manages a private site you are collecting on if they ask for one. The receipt should include:
- the address of the site;
- the box number;
- the date of the collection; and
- the amount received.
In Scotland, Northern Ireland or a licensing authority which follows the model regulations in England and Wales, by law, all collecting boxes are legally required to be labelled, numbered and sealed.
In England and Wales, each licensing authority can set its own regulations for how cash collecting boxes should be used in street collections. Many licensing authorities have adopted the model regulations provided by The Charitable Collections (Transitional Provisions) Order 1974. In London, street collections are governed by The Street Collections (Metropolitan Police District) Regulations 1979 and the City of London Street Collections Regulations 1980. If you use cash collecting boxes as part of street collections in London or in a licensing authority which has adopted the model regulations, you are legally required to make sure:
- cash donations are put in a sealed container or collecting box; and
- the promoter of the collection and one other responsible person or a bank official are present when you open collection boxes.
In England and Wales, if you use cash collecting boxes as part of house-to-house collections you are legally required to keep to the House to House Collections Regulations 1947.
In Scotland, processes for cashing and banking donations from collections licensed by the local council and carried out using collecting boxes or sealed envelopes, are covered by the Public Charitable Collections (Scotland) Regulations 1984. Under these regulations, you are legally required to:
- only accept cash donations by allowing the donor to put them straight into the collection box when carrying out collections licensed by the local council; or
- if the collection is made using sealed envelopes, only accept donations in the appropriate sealed and numbered envelopes.
In Northern Ireland there is no specific legislation for collecting boxes. However, The Police, Factories, etc. Act 1916 (as far as it applies) and The Collections in Street Regulations (Northern Ireland) 1927 outline regulations for street collections. For further standards on cash collection boxes, see section 7.5 Convenience giving and unstaffed collections.
3.2 Tills
In this section, ‘you’ means a charitable institution or third-party fundraiser.
You must make sure that all money is put into the till immediately and any change is given from the till, not from personal money.
3.3 Floats
In this section, ‘you’ means a charitable institution or third-party fundraiser.
When using floats, you must make sure:
- they are signed for by the person you have nominated;
- float cash is kept separate from the personal money of the people handling it; and
- a separate record is kept of any float money that is used for petty cash.
3.4 Cheques, charity cheques and vouchers
In this section, ‘you’ means a charitable institution or third-party fundraiser.
You must make sure cheques, charity cheques and vouchers are processed appropriately and without delay. This includes:
- using secure methods, appropriate to the value of the donation, to send them to banks or fulfilment houses;
- not giving change in return for cheques; and
- not issuing refunds for a cheque donation until the cheque has cleared and the money has appeared in your account.
Under the Income Tax Act 2007, you are legally forbidden from claiming tax back on a charity cheque or voucher donation, as Gift Aid was added before you received it.
3.5 Card and online transactions
In this section, ‘you’ means a charitable institution or third-party fundraiser.
This section applies to transactions both where the donor is present and where they are not. This includes staffed and unstaffed payment devices, such as tap-to-donate, and online payments on a charitable institution’s website. The steps you need to take to make sure payments are secure will vary depending on the number of transactions that are made.
You must use appropriate security measures for online and card transactions.