Fundraising is regulated – that means that there are standards to follow in how you ask for money, and a system to investigate complaints from the public about fundraising.
It’s really important that you know what the rules are so that you can make sure you always fundraise in the right way.
Wherever you are in the UK, there is an organisation that regulates ‘charities’ and an organisation that regulates ‘fundraising’. Charity regulators are statutory – set up by Government – whereas fundraising regulators are independent.
It’s the job of national charity regulators to register charities and make sure they are being run properly and lawfully. The bodies are: The Charity Commission for England and Wales, the Charity Commission for Northern Ireland (CCNI) and the Office of the Scottish Charity Regulator (OSCR). Regulators for fundraising are responsible for setting standards for how charities fundraise, take complaints from members of the public, as well as investigate and adjudicate any instances of poor practice.
All the rules for fundraising are set out clearly within the Code of Fundraising Practice. This includes both legal rules that you need to know about and follow, as well as standards for fundraising that are set through fundraising regulation. Every fundraiser, whether employed by a charity or a volunteer, is expected to follow the standards set out in the Code of Fundraising Practice.
While detailed rules for each area of fundraising are set out in the Code of Fundraising Practice, it helps to remember that fundraising should always be legal, open, honest, respectful and accountable.
Put into practice, this means:
Handling donations safely and securely
Think carefully about how you will handle funds. Safe and secure donation handling is important to protect your fundraising activities from fraud, theft or embezzlement and to assure donors that their donations and gifts are used for the purpose for which they were given. There are specific laws for how to manage public collections, bank transactions and the signatories required to access charity bank accounts. Also, make sure that you carefully consider expenditure, ensuring that fundraising costs are proportionate.
Honouring your promises to supporters
If money is raised for a specific purpose, it has to be used for that purpose. This means that you will need to think carefully about what you will do if you raise more money than expected or if you fail to achieve your fundraising goals. If you think it’s likely that you may exceed your target, you may need to inform donors from the start how any excess funds will be used.
Taking responsibility for your fundraising
If you have carefully considered your fundraising decisions, you shouldn’t go too far wrong. At the same time, mistakes can happen and sometimes a fundraising project, activity or campaign will not go to plan. Be willing to stand up for your fundraising decisions; to be accountable, explaining your decision-making process. And, if something does go wrong or a complaint is received, make sure you handle any concerns promptly and sensitively, learning what you can from the process.
Treating the public fairly and with respect
We believe that fundraising should always be a positive experience; an action that enables the public to engage with and support the causes that really matter to them. So, always treat the public fairly and with respect, and take care never to pressurise anyone into giving, particularly those who may be considered to be in vulnerable circumstances.
Being clear and truthful
Whether you are raising money for a charity or not, you will need to make it clear who or what you are fundraising for. Always tell the truth and take care not to exaggerate any facts relating to potential beneficiaries.
Most large students’ unions are charities, meaning that they have to follow Charity Law, which is particularly important with student fundraising activities. Charity Law can sound confusing and a little daunting but there are some key areas for you to take note of. If you’re a student fundraiser you don’t need to be a charity law expert, and your SU can help you if you aren’t sure about the law.
All Charities have a charitable purpose. This defines the reason they exist and allows for the charity to have a clear mission to help its beneficiaries. It also is a useful indicator for the public and funders who can be aware of what the charity’s activities are and how it is of benefit. Working outside your charitable purpose is sometimes known as ultra-vires, which is Latin for “beyond the powers”.
Charities can engage in a number of activities, including campaigning, trading, holding debates, running workshops and supporting societies but these are all things that contribute to the purpose, rather than a purpose itself. Charities cannot engage in activities that do not support their charitable purposes. This is because it is the expectation of beneficiaries to that organisation and funders of that organisation (including the general public in most cases) that the charity will be working on that purpose.
As such they do not have power to work on these other purposes.
The Charity Commission for England and Wales and the National Union of Students recognise students’ unions as charitable organisations for the advancement of education. This means that the work that students’ unions do and the way they use their finances and other resources must support Education. The beneficiaries of students’ unions, those that resources can be spent on, are the students who are studying at the partner college or university. Their beneficiaries are defined because they study, not that they live in a certain area or are of a certain age. So the key concept to remember here is that students’ unions are there to advance the education of their students as students. This could involve:
When student groups (e.g. RAG) are raising funds for a charity, it must be clear where the money is going to. Benefit events are slightly more complicated, especially where unions run events as an income stream for their charitable purpose.
Described above as “unique, fun and often mischievous”, fundraising activities don’t always fit neatly into an insurer’s expectation of the risk they are insuring, particularly when students are encouraged to be innovative in finding new ways to fundraise.
For those students’ unions who are insured with Endsleigh, the scheme insurer will already be well versed in the type of activities students’ unions and their RAG or other fundraising groups get up to, but it is important to keep insurers informed of any new activities which are on a larger scale to usual, or carry a potentially hazardous element. A great example is the hitch-hike which is explained later under ‘student fundraising staples’.
Your insurance provider is also a good place to seek assistance on risk management. Endsleigh is happy to provide guidance on risk assessments and can also share useful documents from other students’ unions with their permission. As part of your risk management, you may decide to use a third party provider to organise the larger challenges which would remove a large chunk of the exposure from the students’ union.