2.Responsibilities of those who govern charitable institutions
The people who govern charitable institutions (such as the trustees of a charity) have a responsibility to act in the best interests of their organisation. They are responsible for fundraising.
This section sets out the standards we expect from them, including those relating to risk assessments and effective procedures for handling complaints and for making sure donations are used for the purposes they are given for.
2.1 General duties
In this section, ‘you’ means the governing body of a charitable institution.
You must act reasonably and carefully in all matters relating to fundraising. This may include:
- taking overall responsibility for fundraising activities, including those you have delegated to others;
- following codes and guidance from relevant regulators;
- making sure your fundraising activities keep to data-protection requirements;
- getting appropriate advice when needed;
- considering the effect of controversial fundraising campaigns;
- assessing and managing risks that fundraising poses to your charitable institution’s activities, beneficiaries, property, work and reputation; and
- meeting any reporting and accounting requirements that apply to a donation.
National Council for Voluntary Organisations (NCVO):
You must take reasonable steps to protect fundraisers from harm and harassment while fundraising. This includes:
- having processes for fundraisers to report any issues that arise; and
- taking reasonable steps to deal with any issues that are reported.
You must respond constructively and within an appropriate time to any enquiries you receive from us or the Scottish Fundraising Adjudication Panel relating to keeping to the code. You must also make sure your fundraising partners do the same.
You must be able to show that you have acted in the best interests of your charitable institution when fundraising. This includes:
- identifying and dealing with potential conflicts of interest;
- making sure donations are used for the purposes they are given for; and
- making it clear to people fundraising on your behalf that all donations must be sent to your charitable institution.
You must not sell personal data to, or share it with, any other organisation unless you have the information owner’s consent to do so.
If you share personal data for fundraising or direct-marketing purposes, the Information Commissioner’s Office (ICO) expects you to tell the person concerned the name of any third party you are sharing their personal data with.
If you rely on legitimate interest as the lawful basis for processing personal data, you must record details of your decision-making in line with the ICO’s requirements.
Fundraising Regulator: The rights people have over their data
Fundraising Regulator: Legal requirements for storing, maintaining and sharing data
Fundraising Regulator:
2.2 Accepting, refusing and returning donations
In this section, ‘you’ means the governing body of a charitable institution.
You must only refuse or return donations in exceptional circumstances. If you decide to refuse or return a donation you must document your decision appropriately.
You must make sure those fundraising on your behalf are aware that decisions relating to refusing or returning a donation must be made by you or in line with a policy you have set.
You must carry out appropriate due diligence, proportionate to the size and nature of the donation, on the potential donor before accepting a donation.
You must only refund a donation in line with your charitable institution’s policies or in exceptional circumstances. However, you must refund a donation if a donor correctly exercises their right to a refund.
Before you refund a donation, you must make sure you have the power to do this. If it is unclear whether or not you should refund a donation, consider getting legal advice.
Chartered Institute of Fundraising (CIoF): Acceptance, refusal and return: A practical guide to dealing with donations
Charity Commission for England and Wales (CCEW): Accepting, refusing and returning donations to your charity
Fundraising Regulator: Due diligence and fundraising
2.3 Complaints and concerns about fundraising
In this section, ‘you’ means the governing body of a charitable institution.
You must have a clear and publicly available fundraising complaints procedure which fundraisers can explain to existing or potential donors.
If your fundraising partners do not have a suitable clear and publicly available complaints procedure of their own, they must agree to follow yours.
When you or a fundraising partner receives complaints about your fundraising, you must:
- investigate thoroughly and fairly;
- respond fairly and in a way that is appropriate to the complaint;
- avoid unnecessary delays; and
- regularly review complaints and use any relevant learning to make improvements to future fundraising.
You must have a clear, published procedure explaining how staff and volunteers can report any concerns they have about your fundraising practice. You must make sure the procedure includes:
- the type of issues that can be raised and the process for doing so;
- how the person raising a concern will be protected from victimisation and harassment;
- what you will do when you receive a concern; and
- how to report concerns to us or the Scottish Fundraising Adjudication Panel if it is not possible to consider or deal with them appropriately within your charitable institution.
Fundraising Regulator: Complaints handling guidance
2.4 Paying fundraisers
In this section, ‘you’ means the governing body of a charitable institution.
You must give appropriate consideration to the approach you choose for paying fundraisers and whether this fits the values of your charitable institution.
You are legally required to make sure that any fundraisers who are directly employed by your charitable institution are paid in line with relevant legislation, including the following.
- The Employment Rights Act 1996 (as amended)
- The National Minimum Wage Act 1998 (as amended)
- The Employment Rights (Northern Ireland) Order 1996
You can only pay charity trustees for fundraising if they meet specific conditions as set out in the following documents and legislation:
- Charity Commission for England and Wales: Payments to charity trustees: what the rules are and section 185 of the Charities Act 2011
- Scottish Charity Regulator (OSCR): Guidance and good practice for charity trustees and section 67 of the Charities and Trustee Investment (Scotland) Act 2005
- Charity Commission for Northern Ireland: Making payments to trustees and section 88 of the Charities Act (Northern Ireland) 2008
2.5 Solicitation statements for paid employees, officers and trustees of charitable institutions and connected companies
In this section, ‘you’ means the paid employees, officers and trustees of a charitable institution or connected company.
Solicitation statements are statements that some paid employees, officers and trustees of charitable institutions and connected companies must give when fundraising for a charitable institution. They explain how the charitable institution will benefit from the fundraising activity.
Professional fundraisers and commercial participators must also give solicitation statements. There is more information about these solicitation statements in section 6.4 Solicitation statements for professional fundraisers and commercial participators.
You must make sure solicitation statements are clear, accurate and up to date.
You must make a solicitation statement before:
- a potential donor gives any money; or
- you ask for any financial details relating to a donation.
In England and Wales: Under sections 60A and 60B of the Charities Act 1992 a person who is an officer or employee of a charitable institution or a connected company or a trustee of a charitable institution is legally required to give a solicitation statement if they are acting as a collector in that role and are receiving payment of more than £10 per day or £1,000 per year either for their role or for acting as a collector.
In Scotland: Officers, employees or trustees of charitable institutions or connected companies are benevolent fundraisers for the purposes of the Charities and Benevolent Fundraising (Scotland) Regulations 2009 when fundraising on behalf of charitable institutions and connected companies and will need to keep to those regulations, including regulation 3 on solicitation statements.
More information:
- In England and Wales: Cabinet Office: chapter 4 and Annex C of Guidance on Part 2 of the Charities Act 1992
- In Scotland: OSCR: statement A of Technical Guide: Charities and Benevolent Fundraising (Scotland) Regulations 2009
2.6 Using funds
In this section, ‘you’ means the governing body of a charitable institution.
You must make sure any conditions on accepting a donation, set by you or the donor, are within the purposes of your charitable institution.
You must keep a record of donations that are given for specific purposes to make sure that you keep to the conditions of the donation.
Some organisations provide benefits in return for a donation. These can range from very small (for example, a newsletter or a branded pen) to more significant (such as access to exclusive events).
Providing benefits in return for a donation can have tax consequences. In particular, the level of benefit received can affect whether a donation is eligible for Gift Aid. In some circumstances where benefits are received, a donation may be considered a payment for goods or services, which may mean that VAT is charged.
If you encourage someone to donate by offering benefits, you must make sure:
- you have the power to give benefits;
- the benefits are appropriate in the circumstances; and
- the benefits are proportionate to the size and frequency of the donation.
HM Revenue & Customs (HMRC):
Chapter 3.18 Benefits received by donors and connected persons
How VAT affects charities (VAT Notice 701/1)
Goods or services supplied to charities (VAT Notice 701/58)
Charity Tax Group:
The legal obligations you have as a governing body vary depending on where and how your charitable institution is registered. In general, you are legally required to:
- only ask for funds for a purpose that matches those of your charitable institution;
- make sure funds raised for a particular cause are used for that cause; and
- use funds in line with any conditions you have agreed to or which have been set by the donor.
A donation must be used for the purpose it was given for. If you want to change that purpose you should get advice from legal advisers or the relevant statutory regulator before changing the purpose, even if the person making the donation has given you permission to do this.
The main legislation for registered charities is as follows.
- In England and Wales: Charities Act 2011
- In Scotland: Charities and Trustees Investment (Scotland) Act 2005
- In Northern Ireland: Charities Act (Northern Ireland) 2008
Community interest companies (CICs) are covered by the Companies Act 2006.