Tag: fundraising

Charity Fundraising Appeals: Appeal Wording and Record Keeping

Getting your appeal wording right

Charities often run appeals for specific purposes or projects. If you are planning to do that, think carefully about how you word that appeal.

Donations to an appeal for a specific purpose (or purposes) must be used only for that purpose (or purposes).

Include a ‘secondary purpose’

If you are fundraising for a specific purpose, think about including a secondary purpose or purposes in your appeal wording. This says how you will use donations if you raise too much or too little, or the charity cannot use the donations as intended.

Keeping donor and appeal information

Plan how you will keep donor and appeal information before you start your appeal.

Information you should keep:

  • donor name, contact details, amount and date received
  • how the payment was made, for example, via text or online (if you use an online platform make sure you can contact those donors if necessary)
  • letters, emails or other information you collected with the donation
  • your appeal literature including any changes made
  • any Gift Aid you claim on donations, as you may need to contact HM Revenue and Customs if you return donations
  • any conditions attached to a donation (if the donation was not given as an outright gift)

Understand your data protection responsibilities under GDPR.

You will also need this information to follow the required process, detailed in the guidance below, if you are unable to use your appeal donations as intended.

What to do if you are unable to use donations as intended

If you did not include a secondary purpose, you must take specific steps before you can use donations for new purposes. The steps required are set out in our guidance:

The Disadvantages of Being A Charity

There are many advantages to being a charity including

  • tax breaks;
  • a good level of public trust;
  • a defined purpose, acting for the public benefit.

BUT charities also have restrictions. For example:

  • If you set up a charity you must apply to register it with the commission if it is a charitable incorporated organisation (CIO) or its annual income is more than £5,000, unless it is a specific type of charity that doesn’t have to register.
  • Charities must follow charity law, which includes telling the Charity Commission and the public about their work.
  • Charities can only have purposes the law recognises as being charitable – they can’t have a mix of charitable and non-charitable purposes.
  • Charities must be independent – a charity can work with other organisations but must make independent decisions about how it carries out its charitable purposes.
  • Charities must be run by trustees who are normally unpaid volunteers – they can only be paid where it is authorised.
  • Charities can’t usually benefit anyone connected with the charity, for example giving work to a trustee’s family member or company, unless it is authorised.
  • Charities can’t take part in certain political activities, such as campaigning for a change in government.
  • Strict rules apply to trading by charities.
  • Registered charities must provide public, up-to-date information about their activities and finances.
  • Charities are outward facing – they can’t be set up to benefit the narrow interests of a closed group.

Charity fundraising appeals: using donations when you’ve raised more than you need

If your charity makes an appeal for a specific purpose or purposes, you must use the donations only for that purpose or purposes.

However, you may receive more donations than you need. For example:

an appeal to refurbish a community café might raise more than needed for the refurbishment; that is, the café is refurbished and there is money left over

an appeal to buy equipment for a playground might raise more than needed – all the equipment has been bought and there is money left over

If this happens, you have donations given for a particular purpose, but you cannot use them for this.

Look at your appeal wording. It may allow you to spend the donations on your charity’s other projects.

If not, you will need to follow the required process set out below to decide a new purpose for the donations, so that you can use them.

Donations to an appeal are usually money, but can be property of any kind. For example, goods.

More detailed information and guidance can be found here

News from the Charity Commission

Do small charity annual reports and accounts meet the reader’s needs?

We are reviewing small charities’ annual reports and accounts because they are the prime means by which the trustees are publicly accountable to donors, beneficiaries and the wider public for the charity’s activities and how they have used the charity’s money.  Good reporting is important to public trust and confidence in both the reporting charity and the wider charity sector.

We were led us to focus on the following criteria:

  • have the trustees provided us with both an annual report and accounts?
  • does the annual report explain what activities the charity had carried out during the year to achieve its purposes?
  • do the accounts contain both an analysis of receipts and payments and a statement of assets and liabilities and are these consistent with each other?

You can find out more details here

Closing a Charity – The Law

charity_2232731kClosing a Charity – The Law

Charities can close for a number of reasons, such as:

  • a merger with another charity
  • the original purpose has been met or is no longer relevant, for example treating a disease that has since been eradicated in the area the charity serves
  • losing funds or funding
  • a lack of members
  • becoming a company or charitable incorporated organisation (CIO), which means creating a separate charity

If you do decide to close your charity, you’ll need to tell the Charity Commission if it is a Registered Charity, and clear all its debts and liabilities before you spend its remaining assets on your charity’s purposes. This will include checking if you have any:

  • unspent grant money – if so, check if there is any specific agreement with the grantmaker about what to do with it where you are closing the charity
  • money from fundraising appeals that haven’t reached their target – if so, check the commission’s guidance on failed appeals to see if you need to return any donations to donors

Further detailed guidance can be found here: https://www.gov.uk/guidance/how-to-close-a-charity