The choice of fund-raising methods is a matter for trustees to decide. However, charities need to be alert and sensitive to public opinion and criticism. Fund-raising methods which meet with disapproval can damage the charity and reduce public confidence in the sector as a whole.

It is essential to spend time before undertaking any fund-raising exercise to develop a strategy: some forms of fund-raising can be costly and it is important to be sure that the costs will be justified in terms of a realistic return. The strategy will need to cover the following points.

• The need for funds - are funds required for a special project or part of the charity’s rolling programme of work? How much is needed? Would it be possible to collaborate with other charities operating in the same field to meet the need?
• Possible sources of funding - for example, grants from local or central Government, grant-making charities or companies.
• The resources available to support fund-raising - fund-raising costs money. Costs can range from producing appeal literature to employing a professional fund-raiser and organising fund-raising events.
• The proportion of gross receipts which will be left after fund-raising costs have been met. We strongly recommend that trustees agree, in advance, the likely proportion of the gross receipts which will be spent on the costs of fund-raising. Actual performance needs to be monitored against that target and the trustees should satisfy themselves that the expenditure is justified.

Before committing expenditure to fund-raising it may be useful to obtain advice from an appropriate professional or specialist.

Where to get Help and Information

Voluntary Action Luton, the local Council for Voluntary Services, has a range of directories giving details about grant-making trusts.  They will have up-to-date information on available funding opportunities locally and regionally.  Voluntary Action Luton also has a database programme called Funder Finder to help you identify funders most likely to support your work.

At Voluntary Action Luton you can get advice at every step of the process -

• Finding appropriate funders
• Planning your budget
• Completing the application
• Managing the money (if you get it)

Further information on one particular form of fund-raising - trading - is in our separate guidance Charities and Trading (CC35).

Fund-raising by local charities for other charities

Where a local charity raises funds for another charity by acting simply as a fund-raising agent then the following points need to be borne in mind:

• prospective donors need to be clear which charity the funds will benefit;
• the funds raised belong in law to the beneficiary charity and the collecting charity can only contribute to the costs of the fund-raising if the purpose of the fund-raising is within the collecting charity’s objects;
• separate financial records should be kept; and
• the permission of the beneficiary charity needs to be sought before using their name and it is essential that they approve copies of any fund-raising literature.

We strongly recommend that trustees check whether the beneficiary charity is a registered charity before fund-raising starts. Under section 63 of the Charities Act 1992 a person may be found guilty of an offence where they falsely state that an institution for which they are raising money is a registered charity unless they have reasonable grounds for believing that the institution was registered.