How to raise funds effectively and legally, protecting the public’s trust and confidence in your charity’s work.
Methods of raising funds
There are many ways to raise funds, for example:
- public collections, door-to-door or street fundraising
- gaming, such as lotteries and raffles
- events, for example street fairs
- online, on the television or by telephone
You can plan your fundraising more effectively by considering:
- how much you want to raise – is there something particular you want to use the money for and a minimum amount you need?
- the timescale – if you are fundraising for a specific purpose you should set a start and end date for your activities
- who will raise the funds – will you hire professionals to fundraise, do it yourself or recruit volunteers?
- the purpose of the activity – are you trying to raise funds or just awareness?
How2Fundraise is part of the Institute of Fundraising and has lots of ideas to help you start fundraising, plus guides on staying safe and following the law.
Laws and guidance for fundraising
No matter how you decide to fundraise, you must comply with the law and you should follow legal or best practice standards.
Laws for all fundraising activities
Your charity must follow the law when fundraising by:
- keeping money raised for an appeal separate from your charity’s general funds
- stating that you are a registered charity on any fundraising materials, such as adverts and websites (if you are registered and your charity’s income exceeds £10,000)
- reporting and commenting on your fundraising activities each year (if you have a gross income of £500,000 and an audit is required – but smaller charities might find this helpful too)
Read more on the laws around fundraising: Charities and fundraising – detailed guidance
Laws and guidance for specific fundraising activities
There are laws and guidance relating to specific types of fundraising activities, such as door-to-door collections, running a lottery or a raffle. Some types of fundraising require you to have licences or carry identification.
The Institute of Fundraising has various codes of practice your charity could choose to follow, for example if you want to work with children, use direct marketing or face-to-face fundraising.
How to handle money correctly
If you are collecting money for your charity, it is important to put controls in place to make sure the money goes towards meeting your charity’s aims. You should make sure that:
- all collection boxes are regularly opened and the contents counted
- at least two people are involved in handling and recording the money received
- all cash you collect is banked by your charity as soon as possible without deducting expenses
Honesty and transparency in fundraising
You can avoid misleading the public by being accountable and transparent about how you fundraise.
Example: If you’re fundraising to buy a piece of equipment, you need to say what you will do if you don’t raise enough money, or raise too much money. Avoid confusion by stating upfront that you will add any extra or insufficient money to your charity’s general funds.
Gift Aid
Gift Aid is a way for charities to increase the value of donations from UK taxpayers. When people donate using Gift Aid, you can reclaim tax from HM Revenue and Customs. For every £1 donated, you can claim an extra 25 pence. Additionally, under the Gift Aid small donations scheme, some charities are eligible to claim a top-up payment on their small cash donations.
HM Revenue and Customs advises on Gift Aid, the Gift Aid small donations scheme and other tax matters. You can also download Gift Aid declaration forms and helpsheets.
Gift Aid: the basics – HM Revenue and Customs
Consultation
The Charity Commission launched a public consultation on the revised guidance – the consultation closed on 11th February 2016 and the feedback is now being analysed.