Trust lies at the core of Scotland’s charity sector. Families often trust charities to be there for their loved ones at their time of greatest need. Communities trust organisations to keep services and venues alive. Volunteers trust the people with whom they work to be inclusive, encourage diversity and treat them fairly.
And every single person or grant-giver who donates money to any charitable cause trusts that it will be managed and spent not just responsibly, but legally.
The need to get it right with fundraising - particularly in financially challenging times - should not be underestimated.
At its most basic level, the more effective your fundraising, the stronger your organisation’s financial position should be.
But it is more than that. For so many, fundraising is the link between a charity and the public. It is a way in which key messages about mission, work and impact are shared. It is the vehicle by which awareness and, hopefully, positive awareness is raised.
Get it wrong and it can mean the opposite, affecting not just your charity’s standing, but that of the entire sector.
That is why it is so important for charity trustees and fundraisers to know their legal requirements.
Charity fundraising in Scotland is self-regulated, meaning the sector itself sets the standards by which everyone is expected to operate.
Organisations are expected to keep their own houses in order. The independent Scottish Fundraising Adjudication Panel is only asked to intervene if an individual charity does not deal with, or is unable to resolve, a complaint. And the Office of the Scottish Charity Regulator (OSCR) intervenes only when there is a risk to public trust and confidence in a charity or the wider sector.
The Code of Fundraising Practice, which is currently being updated ahead of a relaunch next year, sets out the responsibilities which apply to charities and their fundraisers. It has five key pillars:
- Be clear and honest
- Honour your promises to supporters
- Treat the public fairly and with respect
- Handle donations fairly and securely
- Take responsibility for your fundraising
In Scotland, the code is underpinned by a legal requirement for charity trustees to act in the best interests of their charity, including that all fundraising complies with the law and does not put charity’s reputation at risk.
At its most basic level, this means that trustees must:
- Ensure that all funds raised are properly accounted for
- Ensure these monies are used for the purposes they were raised
- Act with care and diligence
- Be able to explain the fundraising work to anyone who asks
Employing a professional fundraiser does not remove these responsibilities. Detailed written and signed agreements must be in place, specifying key provisions.
And we should never overlook the fact that charities must state that they are charities - including their charity number - on all documents.
In so many ways, the legal requirements placed upon charities represent common sense and no less than what the public should expect.
Some relatively simple steps and internal safeguards can ensure that organisations get fundraising right; creating confidence and that immense - indeed, special - trust that people and communities have in Scotland’s charities and the third sector.
If you are ever in doubt, seek professional advice. Getting it wrong can have costly consequences, in more ways than one.
Published 20 March 2024.
