Fundraising by public donation includes the use of collection tins, postal requests, online and email campaigns and (for larger charities) television appeals, including those for disaster relief.
Why consider raising income by Public Donation?
Diversifying your group’s methods of income generation is often the best way to approach fundraising. Relying on just one source of generating income, could leave your group fighting a financial crisis - adding public donations to the mix gives you an addition fundraising option.
There are many positive reasons for considering this form of income generation:-
- public donation from your community (particularly for many small groups) is often an excellent means of gauging local support for your group’s purposes. If people are supportive, they are much more likely to donate
- if the local community are willing and able to put their money into the cause, this sends a positive message to other potential supporters including funders
- building up a positive relationship with your donors can mean that they will continue to support and donate for many years – giving your group some degree of financial security to plan ahead. Your donors may also consider a bequest in their will, leaving your charity with a financial legacy.
All forms of fundraising by public donation are collectively referred to in legal terms as ‘Benevolent Fundraising’ or:-
"the process of seeking money (or the promise of money) for the benefit of benevolent bodies (or companies associated with them) or for general charitable, benevolent or philanthropic purposes."
In these terms, a benevolent body does not have to be a registered charity, but it does need to be an organisation set up with purposes that are specifically:-
Benevolent fundraising of any kind is subject to The Charities and Trustee Investment (Scotland) Act 2005 and The Charities and Benevolent Fundraising (Scotland) Regulations 2009. In Scotland, fundraising compliance for registered charities is regulated by the Office of the Scottish Charity Regulator (OSCR) alongside general fundraising compliance regulated by Local Authorities. There are also the Fundraising Standards Board (FRSB) and the Institute of Fundraising (IoF) whose members sign up to self-regulation under good practice guidelines.
Any person associated with the benevolent body is referred to in the legislation as the ‘benevolent fundraiser’ and this includes charity trading-arms.
The legislation sets out specific requirements concerning:-
- formal fundraising agreements between benevolent bodies and some types of fundraiser
- information which must be provided to potential donors when funds are being sought for benevolent bodies
- conditions attached to donors' rights to cancel or get a refund of their donations
- the prevention of unauthorised fundraising
The Office of the Scottish Charity Regulator’s website includes detailed guidance on these requirements for registered charities.
Legal requirements and best practice
Gaining the support of a potential donor is fundamental to successful benevolent fundraising. The person you are approaching as a potential donor needs to be confident that any money they give will be spent responsibly as part of a genuine good cause. Being a registered charity makes this transparency easier because as a charity your group or organisation’s activities are monitored and regulated within a legal framework.
If your group has charitable status, any potential donor should be able to check that your group is a bona-fide charity (by accessing the OSCR website and checking the Scottish Charity Register). This means that you are legally required to include the following on any collecting tins and supporting fundraising documentation:-
You can offer your potential donor further confidence by becoming a member of the Fundraising Standards Board (FRSB) and displaying the FRSB tick logo on your fundraising materials. This will give a clear indication of your commitment to best practice in fundraising.
Make sure that your fundraisers wear an ID badge and are well briefed to give accurate information about your charity, its activities and how public donations are spent.
Further ways of maximizing the potential of fundraising by public donation
As well as ensuring that your group or organisation complies with legal requirements and best practice, get the most out of fundraising by public donation by making sure that you:-
look after the individual pledging and donating their money – give them information about your charity and how their donation will help, offer them something in return and consider ways in which you can keep them informed of progress.
get any donors to complete a Gift Aid declaration (if you are a registered charity) and make sure that you claim repayment from HMRC.
keep trying to reach new people - consider using all forms of digital media and explore online fundraising options
look after any staff or volunteers dedicated to the task of fundraising
monitor your fundraising – analyze which methods give you the best return
Other Community Toolkit Topics to look at:
Further sources of information
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Last Updated 20/12/2012 11:31