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Code consultation 2024 - Appendix

Appendix for the 2024 code consultation

Secondary Purposes

Charities often ask for donations for a specific purpose or with a target in mind, such as to fix a church roof, or buy a piece of medical equipment. Sometimes these campaigns do not raise enough money to meet their target, and sometimes they raise more money than is needed. If this happens it may be necessary to refund some or all of the donations. 

One way to address this ahead of time is to include clear information about a Secondary Purpose when asking for donations. This can take the form of a brief explanation of how funds donated for the original purpose will be reused if the target is not met, or if it is exceeded. Examples include putting the funds towards another similar piece of work, or towards the general work of the charitable institution.

General Legal Requirements of Governing Bodies

The legal obligations of governing bodies of charitable institutions vary depending on where and how they are registered. The key legislation for registered charities is:

Community Interest Companies (CICs) are covered by The Companies Act 2006. 

In general, governing bodies of charitable institutions are legally required to:

  • Act in the best interests of the institution;
  • Identify and address potential conflicts of interest;
  • Ensure funds and assets are used in a way that meets the purpose for which they were given;
  • Use funds reasonably and sensibly in line with the governing documents
  • Meet legal accounting and reporting requirements; and
  • Ensure people fundraising on your behalf send all money raised to the institution.

Further considerations specifically for charity trustees in Northern Ireland

The duties and responsibilities of trustees regarding fundraising all fall under the general duties of charity trustees to be responsible and accountable for their charity, and to act in the best interests of the charity. Trustees also have an overall duty to control and protect the charity, its beneficiaries, assets, and reputation.

Further Legal Requirements for Fundraising Activities

Your fundraising activities may also be subject to the following legislation:

Guidance on Responsibilities of Charity Trustees

England and Wales

Charities registered in England and Wales should consult: 

Scotland

Charities registered in Scotland should consult: 

Northern Ireland

Charities registered in Northern Ireland should consult: 

Organisations established for philanthropic and benevolent purposes

The governing bodies of non-charitable voluntary organisations established for philanthropic and benevolent purposes will have similar duties to those set out above in relation to charities.

Guidance on Accounting Requirements

The rights people have over their data

The United Kingdom General Data Protection Regulation (UKGDPR), part of the Data Protection Act 2018,  gives people the following legal rights over their personal data. 

Special category data

Certain types of data need stronger protection. This includes information relating to: 

  • Race or ethnic background;
  • Political opinions; 
  • Religious or philosophical beliefs;
  • Trade-union membership;
  • Genetics;
  • Biometrics (e.g. a fingerprint or facial scan used to identify a person);
  • Health;
  • Sex life; or
  • Sexual orientation (sexuality).

The Information Commissioner’s Office (ICO) is the lead regulator on data protection in the UK and so can provide the most up-to-date information on the issue. They offer extensive guidance on a range of topics of relevance to fundraising, including:

If you process personal data, you may be required to pay the ICO data protection fee.

Legal Requirements for Storing, Maintaining and Sharing Data

Data Protection and data processing in the UK is covered by the following key legislation:

Data Protection Act 2018

The UK General Data Protection Regulations (UKGDPR)

The Privacy and Electronic Communications Regulations (PECR) (including the requirements of The Telephone Preference Service)

In general, when processing personal data, you are legally required to:

  • have a “lawful basis” for collecting, using, and keeping personal data;
  • give people clear and easily accessible information about how you will process personal data; and
  • only process personal data in ways that person would reasonably expect;

There are also a number of legal requirements about how you store, maintain and share personal data. In the context of fundraising these include ensuring that data is:

  • stored securely;
  • accurate and up to date (including people’s contact preferences);
  • only kept for as long as necessary; and
  • kept confidential and only shared with other organisations as permitted by law.

Subject Access Requests

If you process a person’s personal data you are legally required, on request from that person to: 

  • provide them with a copy of the personal data you hold (a Subject Access Request); and 
  • ensure their data can be easily moved, copied, or transmitted from one computer system to another.

The ICO provides guidance on these areas: 

Data Protection for Direct Marketing

Section 122 of the Data Protection Act 2018 defines direct marketing as: “the communication (by whatever means) of advertising or marketing material which is directed to particular individuals”. Some marketing is not directed to specific people (for example, unaddressed mail) and so is not covered by this definition.

The ICO’s Direct Marketing Guidance explains that fundraising activity, as well as charities’ promotional and campaigning work, is covered by the definition of direct marketing.  In practice, fundraising messages which are sent electronically (for example, phone calls, texts, emails and social media) or by addressed mail are likely to be directed to a specific person, and so are covered by this definition.

In addition, if you send marketing electronically, such as by email, text message, or a recorded phone call, you must comply with the Privacy and Electronic Communications Regulations (PECR), which requires a person’s consent to send them direct marketing in most cases.

The ICO’s Guidance on Direct Marketing Using Electronic Mail provides more information on complying with PECR, including details of how it applies to fundraising activity.

Exemption Orders

Exemption Orders allow organisations to carry out certain fundraising activities without the need to apply for specific licenses and permits each time. If you have an Exemption Order you must ensure it is valid and applies to your fundraising activity. Exemption Orders are managed by:

Private Sites

On private sites which do not require licenses or permits, you should:

  • Seek appropriate permission from the site owner or manager (for static collections this must be in writing);
  • Record details of who took your booking and what activity was agreed, and retain these for at least 28 days after the booking;
  • Ensure staff at the site are aware of your activity on the day; and
  • Only approach potential donors in ways, at times, and in locations agreed with the site owner. 

Site Management Agreements

Licenses and permits are often not required when collecting regular gifts (such as direct debits) on the street.  However, you should check whether the relevant local authorities has a Site Management Agreement in place for street fundraising and meet these standards. 

Legal Requirements for Licenses and Permits

Licenses and permits for collections on public land are covered by the following legislation:

In England and Wales:

In Scotland:

In Northern Ireland:

Door-to-door collections are covered by the following legislation:

Permission from private site owners is covered by The Criminal Justice and Public Order Act 1994.

Requirements for Fundraising Documents

Fundraising documents are legally required to contain certain relevant information about your charitable institution. This includes:

  • The registered company’s full name;
  • Registration information (charity number and/or company number;
  • The place of registration of your company (e.g. England, Scotland);
  • The address of your registered office*; 
  • That you are a limited company if your name does not contain “Limited”; and
  • The name, address, and contact details of the collector, if this is different from the charitable institution.

*If documents contain more than one address, you are legally required to indicate which is the registered office address.

If the names of your directors are included in document letterheads, you are legally required to name all current directors.

Legal Requirements for Events

Depending on the nature of your event, you may need to consider the following legal requirements:

When choosing a venue you may need to consider:

Events involving travel may be subject to:

When selling or distributing products or food at your event:

If you are unsure what legislation applies to your event, you should seek appropriate legal advice.

The law in England, Wales and Scotland 

Section 14 of the Gambling Act 2005 states that a lottery is a type of gambling which has three essential characteristics.

  • You must pay to enter the game.
  • There is always at least one prize.
  • Prizes are awarded purely by chance.

Lotteries include raffles, tombolas, sweepstakes and some other activities. 

The Gambling Act 2005 created six categories of lotteries:

  1. Private lotteries.
  2. Incidental lotteries.
  3. Customer lotteries.
  4. Small-society lotteries.
  5. Large-society lotteries.
  6. Local-authority lotteries.

Of these six categories, only private lotteries, incidental lotteries and society lotteries can involve charitable fundraising. Lotteries run by, or ‘on behalf of’, charitable institutions are ‘society’ lotteries. However, ‘private’ and ‘incidental’ lotteries can also be organised by people looking to fundraise ‘in aid of’ a charitable institution.  

Society lotteries 

A society lottery with ticket sales below £20,000 for a single draw and below £250,000 in a single year is a small-society lottery and must be registered with the local licensing authority. 

A society lottery with ticket sales above these levels is a large society lottery and must have an operating licence from the Gambling Commission. 

Private lotteries

Private lotteries include private-society lotteries (for people that you are in a club with), work lotteries (for people that you work with) and residents’ lotteries (for people that you live with).

Private lotteries are exempt lotteries - they do not need a licence or permission from any authority (although you should get permission from the event organiser or site owner where relevant).

Incidental lotteries 

Incidental lotteries are lotteries that are held at events (where the lottery is not the main reason for holding the event). 

Incidental lotteries are exempt lotteries – they do not need a licence or permission from any authority (although you should get permission from the event organiser or site owner where relevant).

The Gambling Commission

The Gambling Commission is the lead regulator for gambling-based activity in Great Britain, including fundraising lotteries and raffles. Each type of lottery has its own standards and you can find an overview of these in the Gambling Commission Guidance, including guidance on:

The law in Northern Ireland

Lotteries in Northern Ireland are subject to the following legislation:

Under the legislation, the only legal lotteries are: 

  1. small lotteries which are a small part of exempt entertainment (that is, entertainment which does not need a licence);
  2. private lotteries; 
  3. society lotteries; or
  4. are part of the National Lottery. 

Each type of lottery has its own rules. For more details, see the Northern Ireland Department for Communities’ guidance about The law on lotteries in Northern Ireland. 

You must ensure you meet the relevant codes of practice, licence conditions, and conditions set out in law and relevant regulations.