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 fundraising regulation
No matter how you decide to fundraise, you should have effective systems in place so that your charity complies with the law and fundraising legal duties.
The commission’s guidance on charity fundraising sets out 6 principles to help trustees comply with their legal duties.
The 6 principles are:
- planning effectively – set-out, agree and monitor your approach to fundraising
- supervise your fundraisers – establish a system to oversee your fundraising methods and fundraising carried out on behalf of the charity
- protect your charity – make sure there is strong management of your assets and resources
- comply with the fundraising laws and regulations – in particular in areas such as data protection and licensing laws
- follow recognised fundraising standards – the Code of Fundraising Practice outlines the legal rules that apply to fundraising
- be open and accountable – make sure your charity is well run and you comply with the statutory accounting and reporting requirements
The commission has also produced a checklist to accompany the guidance. The checklist is a series of questions for trustees to evaluate the performance of their fundraising activities.
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
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.