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2.Responsibilities of charitable institutions and those who govern them

Charitable institutions and those who govern them 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, including those related to risk assessments, effective complaints-handling procedures and making sure charitable institutions use donations for the purposes for which they are given. 

Charities

The overriding duty of all charity trustees is to act in the best interests of their charity at all times. In doing this, trustees have several basic responsibilities related to fundraising.

England and Wales

If you are a charity established in England and Wales, you can find guidance in the Charity Governance Code and in the Charity Commission for England and Wales’s CC20 guidance for trustees and essential trustee guide (CC3).

Scotland

If you are a charity registered in Scotland, the Scottish Charity Regulator’s (OSCR’s) Fundraising guidance for Charity Trustees provides information on the legal requirements of Scottish charity law in relation to fundraising and the duties of charity trustees. You can find more information in OSCR’s Guidance and Good Practice for Charity Trustees and the Scottish Governance Code.

Northern Ireland

If you are a charity registered in Northern Ireland, the Charity Commission for Northern Ireland’s (CCNI’s) guidance Fundraising for Charities, its bitesize guidance Fundraising at a Glance – a guide for charity trustees and Fundraising at a Glance – a guide for members of the public provide information on the legal requirements and good practice in relation to fundraising and the duties of charity trustees. You can find more information in CCNI’s Running your Charity guidance which sets out the principles and main elements of good governance for the trustees of charities in Northern Ireland.

Organisations established for philanthropic and benevolent purposes

The governing bodies of non-charitable voluntary organisations will have similar duties to those set out above in relation to charities.

2.1.General duties

In this section, ‘you’ means the members of the governing body of a charitable institution.

2.1.1.

You must take overall responsibility for the fundraising activities of your charitable institution, including if you have delegated responsibility for certain roles to another person.

2.1.2.

You must consider national guidance when overseeing the fundraising activities of your charitable institution and anyone else fundraising on its behalf.

2.1.3.

You must act in the best interests of your charitable institution.

2.1.4.

You must be aware of possible conflicts between the duties you owe to your charitable institution and the duties or loyalties you have to others. You must follow your charitable institution’s conflicts procedures and disregard any other interests you have when making decisions relating to the organisation.

2.1.5.

You must make sure that your charitable institution’s assets and resources are used only for the purposes for which they were given (which may be all or just some of the institution’s purposes). If the charitable institution is a charity, you must make sure it is run in line with its governing document, charity law and all other laws and regulations that apply.

2.1.6.

You must act reasonably and carefully in all matters relating to fundraising. If you are not experts in fundraising, you must take appropriate advice.

2.1.7.

You must make it clear to all people fundraising on your behalf that they must make sure that your charitable institution receives all the money they have raised.

2.1.8.

You must consider the effect of controversial fundraising campaigns on the charitable institution’s reputation.

For more standards on accepting, refusing and returning donations, see section 2.3 Accepting, refusing and returning donations.

Further considerations specifically for charity trustees in Scotland

2.1.9.

You must meet the Charities and Trustee Investment (Scotland) Act 2005 and any regulations made under it or which affect charities. In particular:

  • you must follow the charity’s governing document and the charity trustee duties under section 66 of the 2005 Act; and
  • you must act in the interests of your charity, make sure you act in a way which is consistent with your purposes, and act with the ‘care and diligence’ that it is reasonable to expect of a person who is managing the affairs of another person.

Further considerations specifically for charity trustees in Northern Ireland

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

2.2.Risk assessment

In this section, ‘you’ means the members of the governing body of a charitable institution. 

2.2.1.

You must take reasonable steps to assess and manage any risks fundraising poses to your charitable institution’s activities, beneficiaries, property, work and reputation.

2.2.2.

You must meet the Proceeds of Crime Act 2002, which applies to money or other property that has been gained through criminal behaviour, even if the behaviour is legal in another country.

2.2.3.

You must meet any legal obligations to protect the health and safety of employees, volunteers, the public and anyone else who might reasonably be considered to be affected by your charitable institution’s fundraising activities. For more information, see the websites of the Health and Safety Executive and Health and Safety Executive Northern Ireland.

2.3.Accepting, refusing and returning donations

In this section, ‘you’ means the governing body of a charitable institution. You must make those fundraising on your behalf aware that decisions relating to refusing or returning a donation must be made by you or in line with a policy you have set.

2.3.1.

You must not refuse or return donations, except in exceptional circumstances. 

2.3.2.

If you decide to refuse a donation, you must keep a record of your decision and the reasons for it.

2.3.3.

You must carry out due diligence, appropriate for the size and nature of the donation, on both the financial and reputational dealings of possible partners before accepting their donations.

2.3.4.

You must only refund donations in line with your charitable institution’s policies or in exceptional circumstances. If it is unclear whether or not you should give a refund, consider getting legal advice.

2.3.5.

You must give a refund if a donor correctly exercises their right to one.

Further guidance

2.4.Complaints and concerns about fundraising

In this section, ‘you’ means a charitable institution and the members of its governing body.

2.4.1.

You must have a clear and publicly available complaints procedure which must also apply to third-party fundraisers.

2.4.2.

You must make sure fundraisers can explain to members of the public how to make a complaint.

2.4.3.

You must make sure that:

  • complaints are investigated thoroughly and fairly to find out the facts of the case, avoiding unnecessary delay; and
  • you respond to complaints fairly and in a way that is in proportion to the complaint.
2.4.4.

You must regularly review any lessons to be learnt from complaints and use that learning to help you with future fundraising activity.

2.4.5.

You must have a clear and published procedure for members of staff and volunteers to report any concerns they have about your fundraising practice. This could be either a stand-alone policy or part of a wider whistleblowing policy which is available to staff and volunteers. You must make sure the policy 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 a person can report their concerns to us (the Fundraising Regulator) or the Scottish Fundraising Standards Panel if it is not possible for it to be considered or resolved within your charitable institution.
Further guidance

2.5.Paying fundraisers

In this section, unless we say otherwise, ‘you’ means a charitable institution and the members of its governing body.

2.5.1.

You must use all funds reasonably and sensibly in the interests of your charitable institution. This involves making sure that what you pay your fundraisers is proportionate to the benefit you reasonably expect to gain from their work.

2.5.2.

You must not pay fundraisers excessive amounts. Where appropriate, you must put a cap on how much you pay fundraisers or use a reducing sliding scale to avoid excessive pay. 

2.5.3.

You must have effective systems in place for managing performance and recognising the effect the payment method can have on the fundraiser, you, the beneficiaries and the public.

2.5.4.

You must not use commission payments unless:

  • you have explored and exhausted all other sources of fundraising investment;
  • you (or senior executives, if you have delegated power to them) approve any payments; and
  • there are measures in place to make sure excessive payments are not allowed.
2.5.5.

You must monitor commission payments to make sure that they continue to strike a balance between reducing risk and encouraging fundraisers effectively.

2.5.6.

If you directly employ people to fundraise, you must make sure that the method of payment you choose meets the Employment Rights Act 1996 (in Northern Ireland The Employment Rights (Northern Ireland) Order 1996), and you must meet the minimum wage rules set out in the National Minimum Wage Act 1998.

2.5.7.

You must make sure that professional fundraisers, commercial participators and, where this applies, your own staff give solicitation statements when they ask for donations on behalf of your charitable institution.

2.5.8.

If you are a charity trustee, you must not be paid for fundraising for your charity unless you meet specific conditions which depend on the country you are based in.

Further guidance

2.6.Solicitation statements for paid employees, officers and trustees of charitable institutions and connected companies

In this section 'you' means the paid employees, officers and members of the governing body of a charitable institution or connected company. 

England and Wales

2.6.1.

If you are carrying out a public charitable collection, and are paid more than £10 per day or more than £1000 per year to collect donations for the benefit of one or more charitable institutions and are not a professional fundraiser, you must make a statement saying:

  • the name of the charitable institution or institutions which will benefit and, if there is more than one, the proportions in which they will benefit;  
  • that you are an officer, employee or member of a governing body of a charitable institution; and
  • that you are receiving payment as an officer, employee or member of a governing body, or for acting as a collector. You do not have to say how much you receive.
2.6.2.

You must make the statement either before the donor gives any money or before you ask for any financial details relating to the donation (whichever is sooner).

2.6.3.

If you ask for a donation for general charitable, benevolent or philanthropic purposes (not for a specific named charitable institution), you must make a similar statement that you are being paid for those general purposes.

Northern Ireland

2.6.4.

You must follow the same standards as in England and Wales.

Scotland

2.7.Using funds

In this section, ‘you’ means the members of the governing body of a charitable institution. 

A donation must be used for the purpose for which it was given. If you want to change that purpose you should get advice from legal advisers or the relevant national statutory regulator before changing the purpose, even if the person making the donation has given you permission to do this.

2.7.1.

You must use all funds raised for a particular cause for that cause.

2.7.2.

You must make sure that donations are used to support the cause in line with any conditions attached to the donation. This may be conditions the donor sets when making the donation or representations you make (either verbally or in fundraising materials) about how the money will be used.

2.7.3.

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.

2.7.4.

You must make sure that you do not suggest money is for a restricted purpose (such as buying a goat, or helping a particular child) when it may be used for a different purpose or for the general purposes of a charitable institution.

2.7.5.

If you are fundraising for a particular purpose, you must include a statement saying what will happen to funds you receive if the total amount raised is not enough to reach (or is more than) the target.

For more standards on accepting, refusing and returning donations, see section 2.3 Accepting, refusing and returning donations.

2.7.6.

You must not ask for funds for a purpose that does not fit within the purposes of your charitable institution.

2.7.7.

If you encourage someone to donate by offering benefits, you must make sure:

  • you have the power to give the benefits; 
  • the benefits are appropriate in the circumstances; and 
  • the benefits are proportionate to the size and frequency of the donation.
2.7.8.

You must be aware when benefits cancel out possible tax relief such as Gift Aid or top-up payments available under the small-donation rules. If benefits do prevent the donation qualifying under Gift Aid or the Gift Aid Small Donations Scheme rules, you must not try to reclaim tax on the donation. The tainted-donations rules may apply to some benefits.

Further guidance

2.8.Accounting and reporting

In this section, ‘you’ means a charitable institution and its governing body.

2.8.1.

You must follow all legal accounting requirements. 

2.8.2.

If you are a charity that the Charity Statement of Recommended Practice (SORP) applies to, you must follow it in your accounting and reporting.

2.8.3.

You must meet any specified reporting requirements if they apply to a donation.

Further considerations England and Wales

2.8.4.

If you are a charity and you have to have your accounts audited under section 162A of the Charities Act 2011, under section 13 of the Charities (Protection and Social Investment) Act 2016 you must state in your trustee annual report:

  • your approach to fundraising, and whether you used a professional fundraiser or commercial participator;
  • details of any voluntary regulatory fundraising schemes or standards which you or anyone fundraising on your behalf has agreed to;
  • details of any circumstances where you have failed to keep to a scheme or standard;
  • whether, and if so how, you monitored fundraising activities carried out on your behalf;
  • how many complaints you or anyone acting on your behalf has received about fundraising for your charity; and
  • what you have done to protect vulnerable people and others from unreasonable intrusion on their privacy, unreasonably persistent approaches or undue pressure to give, in the course of or in connection with fundraising for your charity.
Further guidance