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Note: MUST* and MUST NOT* (with asterisk) denotes legal requirement

MUST and MUST NOT (without asterisk) denotes requirement of the Code of Fundraising Practice

The following Legal Appendices MUST be read in conjunction with this section of the Code of Fundraising Practice

20.1 Preparation and Procedure

20.1.1 Scope

For the purposes of this Code and the law, collection envelopes and collection boxes are treated in the same way, unless otherwise stated. The following guidance covers donations received in person and donations received through the post.

20.1.2 General Requirements

a) Records MUST be made of donations for specific purposes (certain appeals/projects etc) to ensure that the terms of donations are complied with. Such terms MUST* be complied with.

b) Professional fundraisers (L8) and commercial participators (L9) MUST NOT* make any deduction from cash received for the organisation. Other fundraisers MUST NOT* make deductions from cash received unless agreed with the organisation.

c) Local Authorities may impose additional rules about making deductions from collections and fundraisers/fundraising organisations MUST* comply with these where relevant.

d) Expenses MUST* be met (where previously agreed) by the organisation after receipt of the donation.

20.1.3 Receipts

a) For house-to-house cash collections where a sealed collecting box is being used, donations MUST* be placed inside. Otherwise, the collector MUST* issue and sign a receipt for the donated amount.

b) Under the model regulations for street collections, donations MUST* be placed in sealed collecting receptacles. It is not necessary to give a receipt.

c) In Scotland, a collector in a licensed collection which is carried out by collecting box MUST* only accept donations by permitting the donor to place it in a collecting box. Alternatively, the collection can be carried out by sealed envelopes, in which case the collector MUST* only accept donations in sealed envelopes using the numbered envelopes issued to him. It is not therefore usually possible to issue receipts.

20.1.4 Banking

a) Cash MUST be banked as soon as is practicable. To aid this, organisations MUST have a procedure on banking donations, such as who does it and when.

b) Cash not banked immediately MUST be placed in a safe or other secure location.

c) In Scotland, where cash is received in collection envelopes or collection boxes as part of a public charitable collection, it MUST* be counted and banked in accordance with the Public Charitable Collections (Scotland) Regulations 1984, as amended.

20.2 Cash

a) Cash MUST be collected, counted and recorded by two unrelated individuals, wherever possible. (Collection boxes MUST* only be examined and opened by the promoter of the collection (e.g. a charity’s fundraising manager) and one other responsible person or by an official of a bank).

b) Unsecured cash MUST never be left unattended or in an unattended environment.

c) At the earliest possible date, reconciliation MUST be made between cash banked and income summaries. Where practical, this MUST be undertaken by a person independent of the counting and cashing up of the money.

d) Cash MUST be counted in a secure environment.

20.3 Cheques

a) Cheques MUST be banked or, where used, sent to the organisation’s fulfilment house promptly.

b) If sending cheques to a fulfilment house or external processor, organisations MUST ensure the method of sending the cheque is appropriate to the value being transported.

Further information about cheque procedures is available from the Cheque and Credit Clearing Company.

20.4 Charity Vouchers/Cheques

Charity voucher/ cheque accounts enable donors to make donations(s) via a lump sum or regular amounts into an account. The agency administering the account will claim and add Gift Aid to the donation. The donor is issued with a book of vouchers/cheque book to donate this money to their preferred charities. On receiving the voucher/ cheque, the beneficiary charity contacts the agency and arranges for the donation to be transferred.

a) Organisations MUST NOT* reclaim tax on the donation, as the Gift Aid was added before receipt.

b) Vouchers MUST be banked/ redeemed promptly, ideally the next working day, unless the voucher organisation requires otherwise

20.5 Card Transactions

This section applies to transactions both where the donor is or is not present.

The steps that need to be taken to ensure security will vary depending on the number of transactions that are made. Guidance is available from the Payment Card Industry Security Standards Council.

a) OrganisationsMUST comply with the Payment Card Industry Data Security Standards (PCI-DSS). PCI-DSS consists of 12 requirements that all organisations and businesses processing card payments have to meet.

Section 5: Personal information and Fundraising includes further information on requirements relating to data protection.

b) Additional security measures such as Verified by Visa and 3D Securecode MUST be used for online transactions where resources allow.

c) The PCI-DSS state that the CSC should not be stored and this requirement MUST be observed.

d) Where charges are made for transferring payments, the total donation amount MUST be recorded as income, with a further record of expenditure to cover the charges.

20.6 Direct Debits

a) The procedures and rules surrounding direct debits will vary dependent on the bank used by the organisation. The Direct Debit Guarantee exists to provide unified standards and protection to customers. Organisations which have signed up to the scheme MUST* comply with it.

20.7 Children

a) Children under 16 MUST NOT be left with overall responsibility for handling money and/or responsibility for counting collected money.

b) In England and Wales, house to house collections MUST NOT* be carried out by anyone under 16. Collectors in street collections MUST NOT* be under 16 except in London where, if special consent is obtained, street collectors aged 14 or over can be used.

c) In Scotland, where a collection qualifies as a public charitable collection, children under 14 MUST NOT* be allowed to participate if it is a street collection, and children under 16 MUST NOT* be allowed to carry out house to house collections.

d) In Northern Ireland, youth organisations may have collectors aged 12 years and over if the organisation is approved for the purpose of carrying out the collection by the Department for Communities (Northern Ireland).

20.8 Handling Cash at Events

The information in this section about events only applies to donation processes.

20.8.1 Record Keeping

a) Organisations MUST* ensure that they comply with HMRC requirements regarding record keeping for VAT purposes.

20.8.2 Floats

a) Floats MUST be signed for by a nominated individual.

b) Where petty cash expenditure is paid from the float, this MUST be recorded separately and any receipts kept.

c) Floats and any sale monies received MUST be kept separate from the cash handler’s personal money.

20.8.3 Tills

In this section, tills include all taking and storing money receptacles.

a) All monies MUST immediately be put into the till.

b) Change MUST be given only from the till and never from personal money.

20.8.4 Cheques From Trading

a) Change MUST NOT be given for cheques.

b) Refunds MUST NOT be available until the money is in the organisation’s account.

There is more information about the handling of donations in the Institute of Fundraising’s Handling of Cash and Other Donations guidance.