Charity Fundraising & Income Generation

Ever more charities are seeking fundraising collaborations with external organisations to develop and diversify sustainable income streams. These can be carried out in a number of ways — and the subsequent benefits for those involved can vary considerably.

Typically, corporate partnerships involve a charity partnering with a business. The business may donate money or other resources, such as engaging its staff in fundraising and volunteering opportunities. Such relationships are usually separate from the day-to-day activities of the business, with little or no public promotion.

However, where charities engage with third-party commercial participators or professional fundraisers, the Charities Act 1992 (as amended) and the Charitable Institutions (Fund-Raising) Regulations 1994 require a written agreement to be put in place to satisfy statutory requirements. The legislation also requires commercial participators, professional fundraisers and sometimes paid charity officers, employees and trustees to make what is known as a ‘solicitation statement’ each time donations are sought on behalf of a charity.

Our depth of experience in this sector enables us to help charities ensure that there’s a common understanding of what each arrangement means in practice, as well as the risks involved — and ensure that they’re properly managed. We take advantage of best practice when preparing and advising on the necessary agreements and solicitation statements, where our technical yet practical advice ensures compliance with all legal requirements and the Code of Fundraising Practice.

Charities often undertake appeals to raise funds for a specific purpose. This may include funding repairs or improvements to charity buildings, purchasing equipment or assisting the victims of a natural disaster. 

Where a particular sum is required to achieve the purpose of the appeal, risks arise of either a ‘failed appeal’ (the appeal not raising enough money) or a ‘surplus case' (the appeal raising more than is needed).

To avoid such issues, it’s important to carefully prepare the right fundraising literature in advance of any appeal. This can mitigate the risks of a failed appeal or surplus case. However, while such preparation is advised by the Charity Commission and Fundraising Regulator, this doesn’t always happen in practice. 

Strict rules and legal processes exist in the Charities Act to address failed appeals and surplus cases in a manner that allows for the repurposing and redirection of those funds. Aside from the real and obvious reputational issues for the charity concerned, failed fundraising appeals can also spark the concern and regulatory interest of the Charity Commission, as well as complaints to and investigation by the Fundraising Regulator.