OPERATIONAL GUIDANCE
CHARITY INCOME RESERVES
FUNDRAISING
OG 43 B3 – 15 May 2009
Functional responsibility
| For action |
Charity Services |
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Contents
1. Charity's responsibility
2. When might we become involved?
3. When might an assessment be appropriate?
Glossary of Terms used in this Guidance
Index to further related information
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| The Law |
Refer to a lawyer |
Refer to an accountant |
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1. Charity's responsibility |
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Every charity is responsible for ensuring that its appeals - whether for voluntary public donations, corporate donations, legacies, grants, or any other form of income or endowment - and whether they are made by advertising, direct mail, in person, or by any other method - do not misrepresent the charity's financial position. |
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If a charity is widely believed to have large reserves, appeals for further funds may provoke resentment against the charity and risk damage to both its reputation and more generally the reputation of the sector where an appeal is seeking funds which it apparently does not need. In wording appeals, and in dealing with any reaction to the appeals, it should take care not to give anyone the wrong impression about the extent or urgency of its need for funds. |
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A charity's fundraising policy is largely a matter for the judgement and good sense of individual charities, provided that they operate within the law. |
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2. When might we become involved? |
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We might become involved: |
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Where we receive complaints from members of the public - perhaps concerning a larger charity with a high profile, or after the question of reserves has been highlighted by the media. |
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Where we have reason to query a charity's level of reserves in this case its fundraising practice and policy may be a factor in our discussions. |
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Where, exceptionally, an appeal appears to be so seriously misleading, or so materially incorrect - particularly when allied with other issues of concern - as to warrant the opening of an inquiry. |
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Generally, a member of the public who complains about the content or tone of an appeal should be advised to take the matter up first with the charity concerned and we would only intervene where the charity’s response to their complaint is judged insufficient and our intervention is both appropriate and proportionate. |
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If a number of complaints are received about the same charity, or about a particular appeal, examine the charity's accounts to see whether the level of reserves is a matter for concern - see OG 43 C1. It is important to take accountancy advice before corresponding with the charity to ensure your analysis and findings are reasonable and conclusions justified. (But check the charity’s case history first - CCD may already have taken action or decided that action is unnecessary.) |
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3. When might an assessment be appropriate? |
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A referral to the Assessment Unit is likely to be appropriate only where: |
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We have taken up this issue with the charity in the past but it is refusing to follow our advice. |
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The appeal is so seriously misleading as to call into question the motives and integrity of the charity, eg, it contains significant and material factual errors, or is clearly designed to deceive. |
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The appeal is one of several factors causing concern about the charity. |
Index to further related information