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Section 4

Processing donations

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Please provide any comments you have on the redrafted code rules below. You can comment on as many rules as are relevant to you. You can also save your responses and return to them later.

You can see how rules in the current code relate to the redrafted code in the Table of Changes.

The supporting documents include Code Compliance Guides which will help you understand how to meet the requirements of the redrafted code, and a Glossary with definitions of specific terms in the redrafted rules.

4. Processing donations

This section includes standards about handling different forms of payment to make sure donations are secure (this includes one-off payments and ongoing donation commitments). It also includes information on Gift Aid.

4.1 Cash

In this section, ‘you’ means a charitable institution or third-party fundraiser.

4.1.1

You must have procedures for promptly counting, recording, and banking donations, which outline who does what, and when and how this will be monitored. The procedures must ensure 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, where possible; and

  • cash you have banked matches your income summaries (where 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 prohibited from taking any money from cash they receive.


4.1.2

You must ensure cash donations are accounted for appropriately. This includes:

  • Promptly checking the cash banked matches your income summaries.

  • Ensuring all donated cash is sent to the charitable institution(s) and no expenses or fees are taken, unless these were agreed in advance.


Gift Aid

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 wish to take advantage of Gift Aid, you must:

Cash Collecting Boxes

4.1.3

You must ensure the charitable institution is sent the full amount from all collecting boxes without any expenses or fees being taken, unless pre-agreed.

In Scotland, fundraisers may send the net proceeds from collecting boxes to the charitable institution(s) after deducting expenses or fees, in line with Regulation 11(3)(d) of The Public Charitable Collections (Scotland) Regulations 1984.

4.1.4

You must ensure that all collecting boxes are labelled, numbered and sealed.

4.1.5

You must provide a signed receipt for cash collections if donations were not made using a sealed collection box.

4.1.6

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.

Model Regulations for Cash Collecting Boxes

In Scotland, Northern Ireland, or in a licensing authority which follows the model regulations in England and Wales, all collecting boxes are legally required to be labelled, numbered and sealed.

Legal Requirements for Cash Collecting Boxes

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:

  • Ensure cash donations are placed in a sealed container or collecting box; and

  • Ensure the promoter of the collection and one other responsible person or a bank official are present when you examine and open collecting boxes.

In England and Wales, if you use cash collecting boxes as part of house-to-house collections you must comply with 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. The regulations include a legal requirement to:

  • Ensure you only accept cash donations by allowing the donor to place them directly in the collection box when carrying out collections licensed by the local council; or

  • If the collection is made using sealed envelopes, ensure that donations are only accepted in the appropriate sealed numbered envelopes.

In Northern Ireland there is no specific legislation for collecting boxes, however, The Police, Factories, etc. Act 1916 (as applicable) and The Collections in Street Regulations (Northern Ireland) 1927 outline regulations for street collections.

For further standards on cash collection boxes, see Section 8.5 Unstaffed Collections.

4.2 Tills

In this section, 'you’ means a charitable institution or third-party fundraiser.

4.2.1

You must ensure that all money is put into the till immediately and any change is given from the till, not from personal money.

4.3 Floats

In this section, 'you’ means a charitable institution or third-party fundraiser.

4.3.1

When using floats you must ensure:

  • They are signed for by the person you have nominated;

  • Float cash is kept separate from cash-handlers’ personal money;

  • A separate record is kept of any float money used for petty cash.


4.4 Cheques, Charity Cheques and Vouchers

In this section, 'you’ means a charitable institution or third-party fundraiser.

4.4.1

You must ensure cheques, charity cheques, and vouchers are processed promptly and appropriately. This includes:

  • Using secure methods to send them to banks or fulfilment houses appropriate to the value of the donation;

  • 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.


Legal Requirements for Charity Cheques and Vouchers

Under the Income Tax Act 2007, charitable institutions are legally prohibited from reclaiming tax on a charity cheque or voucher donation, as Gift Aid was added before you received it.

4.5 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.

4.5.1

You must use appropriate security measures for online and card transactions.


Additional Security Measures

The steps you need to take to ensure payments are secure will vary depending on the number of transactions that are made. This may involve meeting the following requirements:

4.5.2

If you are charged for transferring payments, you must record the total donation amount as 'income’ and record the charges in your accounts as 'expenditure’.

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