Note: MUST* and MUST NOT* (with asterisk) denotes legal requirement
MUST and MUST NOT (without asterisk) denotes requirement of the Code of Fundraising Practice
1.0 Key Principles and Behaviours
The work of all fundraising organisations will be; Legal, Open, Honest and Respectful.
1.1 Legal References in this Section
- General charity law principles
- Gift Aid Rules
- Charities Act 1992
- Charities Act 2011
- Charities and Trustee Investment (Scotland) Act 2005
- Charities (Protection and Social Investment) Act 2016
1.2 General Principles
a) A legal principle underpinning fundraising is that all funds raised for a particular cause MUST* be used for that particular cause.
b) Fundraisers MUST NOT denigrate other individuals or organisations.
c) Organisations MUST NOT exaggerate facts relating to the potential beneficiary.
d) Organisations MUST NOT take advantage of mistakes made by the donor.
e) i) Fundraisers MUST take all reasonable steps to treat a donor fairly, enabling them to make an informed decision about any donation. This MUST include taking into account the needs of any potential donor who may be in a vulnerable circumstance or require additional care and support to make an informed decision.
ii) Fundraisers MUST NOT exploit the credulity, lack of knowledge, apparent need for care and support or vulnerable circumstance of any donor at any point in time. There is more information available about responding to the needs of people in vulnerable circumstances and helping donors to make informed decisions in the Institute of Fundraising’s ‘Treating Donors Fairly’ Guidance.
iii) If a fundraiser knows or has reasonable grounds for believing that an individual lacks capacity to make a decision to donate, a donation MUST NOT be taken.
iv) A donation given by someone who lacked capacity at the time of donating MUST* be returned.
f) Organisations MUST NOT engage in fundraising which:
- Is an unreasonable intrusion on a person’s privacy
- Is unreasonably persistent;
- Places undue pressure on a person to donate.
g) Fundraisers MUST NOT continue to ask an individual for support if:
- that person clearly indicates – by word or gesture – that they do not wish to continue to engage; or
- they have reasonable grounds for believing, in the course of their engagement with the individual, that they are in vulnerable circumstances which mean they are unable to make an informed decision to donate.
h) Charities that are legally required to have their accounts audited under section 144 of the Charities Act 2011 MUST* state in their trustee Annual Report (as specified within section 13 of the Charities (Protection and Social Investment) Act 2016):
- The charity’s approach to fundraising activity, and whether a professional fundraiser or commercial participator was used.
- Details of any voluntary regulatory fundraising schemes or standards which the charity or anyone fundraising on its behalf has agreed to.
- Any failure to comply with a scheme or standard cited.
- Whether and how the charity monitored fundraising activities carried out on its behalf.
- How many complaints the charity or anyone acting on its behalf has received about fundraising for the charity.
- What the charity has done to protect vulnerable people and others from unreasonable intrusion on a person’s privacy, unreasonably persistent approaches or undue pressure to give, in the course of or in connection with fundraising for the charity.
Further guidance on the Charity Act.
i) Trustees of Charities (or for Charities without a Trustee Board, those who serve on its governing body) MUSThave regard to national guidance in overseeing the fundraising activities of their Charity and any third parties fundraising on the charity’s behalf.
- For Charities registered in England and Wales, guidance is found in the Charity Governance Code and in the Charity Commission’s CC20 guidance for trustees, the essential trustee guide (CC3) and the welcome pack for new trustees
- For Charities registered in Scotland, the following OSCR guidance provides information on the legal requirements of Scottish Charity law in relation to fundraising and Charity Trustee duties:
- For Charities registered in Northern Ireland, the Code of Good Governance and the Charity Commission for Northern Ireland’s “Running your Charity” Guidance set out the principles and key elements of good governance for the boards of voluntary and community organisations.
1.3 The Donation
1.3.1 Requesting Donations
a) When using donor information in a case study or any other type of publicity, organisations MUST*comply with any duties of confidentiality that they have and comply with data protection law if publishing a case study that includes information that could identify a donor. (Section 5: Personal information and Fundraising includes further information on requirements relating to data protection.)
b) Fundraisers MUST NOT encourage existing donors in any way to change an existing charitable donation to another fundraising organisation.
c) The Charities Act 1992, and Charities and Trustee Investment (Scotland) Act 2005 allow charities to obtain a court order preventing unauthorised fundraising where any individual is using fundraising methods to which the charity objects or where the charity believes that an individual is not a fit and proper person to raise funds on its behalf.
1.3.2 Acceptance and Refusal of Donations
a) The trustees (and their delegates) MUST* act in the best interests of the charity when deciding to accept or refuse a particular donation. (See L7.0 Acceptance and refusal of donations in the Legal Appendices)
1.3.3 Rewards/ Incentives and Benefit Packages
It is common for organisations to engage a donor by offering them benefits related to the size and frequency of the gift.
a) Fundraising organisations MUST ensure that benefits are appropriate for the organisation to be giving, and proportionate to the size of the gift.
b) Fundraisers MUST be aware of when benefits nullify potential 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 small donation rules, organisations MUST NOT* attempt to reclaim tax on the sum.
1.4 After the Donation
a) Any specified reporting requirements to which a donation is subject MUST* be complied with.
b) Fundraising organisations MUST* only make a Gift Aid reclaim in respect of a donation if all of the Gift Aid conditions are met. One of these is that a donor’s Gift Aid declaration MUST* comply with the new guidance issued by HMRC setting out the information that declarations are required to include from 1st January 2013. Where a donation is not eligible for Gift Aid and the organisation wishes to make a claim under the small donations rules, it MUST ONLY* do so if all of the small donation conditions are satisfied.
c) Fundraising organisations MUST* ensure that accepted donations are used to support the cause in accordance with the conditions attached to the donation, which may arise from donor’s stipulations or representations made by the charity as to the uses of the funds.
1.5 Use of Funds
The law in relation to changing the terms of a gift is complex and organisations should obtain advice from legal advisers or the Charity Commission / Office of the Scottish Charity Regulator (OSCR) before seeking to change the terms, even if there is donor consent. In Scotland, in cases where donor consent cannot be obtained, OSCR can permit the restricted fund under which a gift is held to be ‘reorganised’ if certain conditions are met, but only where it is not possible to ascertain the donor’s wishes in relation to the proposed change.
a) If an appeal is being run for a particular purpose, fundraisers MUST include a statement indicating what will happen to funds received if the total funds raised are insufficient or exceed the target.
a) Organisations MUST have a clear and publicly available complaints procedure which MUST also apply to any Third Parties fundraising on their behalf.
b) When dealing with complaints organisations MUST ensure that:
i) complaints are investigated thoroughly and objectively to establish the facts of the case, avoiding undue delay; and
ii) complaints are responded to fairly, proportionately and appropriately.
c) Organisations MUST regularly review any lessons to be learnt from complaints and use that learning to inform future fundraising activity.
d) Fundraising organisations MUST have a clear and published internal procedure for members of staff and volunteers to report any concerns they may have regarding their organisation’s fundraising practice.
i) the type of issues that can be raised and the process for doing so;
ii) how the person raising a concern will be protected from victimisation and harassment;
iii) how and what the organisation will do in response to receiving such information; and
iv) how an individual can escalate their concerns on fundraising practice to the Fundraising Regulator or the Independent Fundraising Standards and Adjudication Panel for Scotland in the event that internal consideration is not possible.
See the Fundraising Regulator's Complaint Handling guidance.
1.7 Returning Donations
a) Fundraising organisations which are charities MUST* not return donations unless certain criteria are fulfilled (see L7.0 Acceptance and refusal of donations in the Legal Appendices). For all other fundraising organisations, donations MUST only be refunded in line with any policies or in exceptional circumstances. It may not be lawful to return a donation and fundraisers MUST take advice from legal advisers or the Charity Commission / OSCR before doing so.
Further Guidance can be found in the Institute of Fundraising’s Acceptance, refusal and return: A practical guide to dealing with donations.