Fund raising and accounting

[dbboy]

If money is raised for a cause, what requirements exist to maintain accounts to show income and expenditure and are these open to public scrutiny?

[Penguin68]

If the fund is registered as a charity then, in theory, it could be challenged. If the fund raiser is just going to donate to a registered charity however then there is no obvious check to be made, unless and if you believe that the fund raising is a scam, in which case it could be reported to the police as such. There is no mechanism whereby the fund raiser could be audited 'on spec'. And if the funds are not destined for a registered charity then no interest would be taken. Caveat emptor.

However, such fund raising could be seen as income generating (depending upon the mechanism being used to raise funds, for instance the sale of tickets or other items) in which case, if the enterprise was seen as being a business, then HMRC could be involved, were there to be tax liability issue. If the fund raising was using a lottery that too is regulated.

(I am not a lawyer, however, so this is based on a normal 'business' understanding of affairs).

[edhistory]

dbboy

Do you mean (hypothetically) funds raised for woods that don't exist?

John K

[Angelina]

You would need to register the cause/ collection as a charity - alternative being a business which has tax implications.

You would also need a bank account in the name of the cause for the donations and expenditure - you most certainly couldn't put it into your own personal account - that would be fraud.

A charity has to be auditable and file accounts, just as a business would.

Donations are often received as cash, but also direct debit. AS such you would need to be able to register donors and keep a track of their individual donations (of course, remembering to thank them).

Obviously, donations from street collections wouldn't apply, but depends on the scale of the charity and the money needed/ methods of collection.

Also, you'd have to look at the way the collections could be spent. If, as an example - someone donates money to fund a certain piece of equipment at a hospital, that money cannot be used for other things, so you would want to be clear that money will be spend on general things of the specific nature of the cause. Unless you have a very specific thing in mind.

[dbboy]

edhistory Wrote:

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> dbboy

>

> Do you mean (hypothetically) funds raised for

> woods that don't exist?

>

> John K

I was asking a question which you can interpret in anyway you like, and in doing so purposely did not mention any organisational or personal names.

[Sue]

dbboy Wrote:

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> If money is raised for a cause, what requirements

> exist to maintain accounts to show income and

> expenditure and are these open to public scrutiny?

I know this isn't exactly what you are asking, but when we held a benefit gig for refugees at The Ivy House in January, we were required to be absolutely scrupulous about how we described the organisation to whom we were donating the proceeds (Help Refugees) in all our publicity material and in ticket sales.

Because it was a small voluntary organisation which wasn't a registered charity itself, we had to say "Help Refugees are a collective fund under the auspices of Prism the Gift Fund, registered charity no. 1099682'."

We were told that this was a legal requirement, as Help Refugees are not a stand alone charity.

I presume (though I don't know) that their income and expenditure would also be shown in Prism's accounts.

In this case, we were completely confident that all the money we made would be spent in the way Help Refugees told us it would, ie for direct aid providing shelter and heating for refugees in Calais and Lesbos, so we didn't ask the question.

[Mick Mac]

dbboy Wrote:

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>

> I was asking a question which you can interpret in

> anyway you like, and in doing so purposely did not

> mention any organisational or personal names.

In which case you are unlikely to get a meaningful or helpful answer.

[Angelina]

dbboy Wrote:

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>

> I was asking a question which you can interpret in

> anyway you like, and in doing so purposely did not

> mention any organisational or personal names.

in which case, what is the point in asking?

[Saffron]

I thought the answers were quite good for general context, proving the reader a springboard for dialogue on the subject.

[edhistory]

Sue Wrote:

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> I know this isn't exactly what you are asking, but

> when we held a benefit gig for refugees at The Ivy

> House in January, we were required to be

> absolutely scrupulous about how we described the

> organisation to whom we were donating the proceeds

> (Help Refugees) in all our publicity material and

> in ticket sales.

>

> Because it was a small voluntary organisation

> which wasn't a registered charity itself, we had

> to say "Help Refugees are a collective fund under

> the auspices of Prism the Gift Fund, registered

> charity no. 1099682'."

>

> We were told that this was a legal requirement, as

> Help Refugees are not a stand alone charity.

Does this mean the Ivy House has this information for any charity event held on 14th February?

John K

[Loz]

edhistory Wrote:

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> Does this mean the Ivy House has this information for any charity event held on 14th February?

I suspect that if the event's proceeds didn't go to a registered charity, the taxman might just be verrrry interested in where it actually did go.

[Sue]

Angelina Wrote:

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> You would need to register the cause/ collection

> as a charity - alternative being a business which

> has tax implications.

> You would also need a bank account in bythe name of

> the cause for the donations and expenditure - you

> most certainly couldn't put it into your own

> personal account - that would be fraud.

>

> A charity has to be auditable and file accounts,

> just as a business would.

>

> Donations are often received as cash, but also

> direct debit. AS such you would need to be able to

> register donors and keep a track of their

> individual donations (of course, remembering to

> thank them).

>

> Obviously, donations from street collections

> wouldn't apply, but depends on the scale of the

> charity and the money needed/ methods of

> collection.

>

> Also, you'd have to look at the way the

> collections could be spent. If, as an example -

> someone donates money to fund a certain piece of

> equipment at a hospital, that money cannot be used

> for other things, so you would want to be clear

> that money will be spend on general things of the

> specific nature of the cause. Unless you have a

> very specific thing in mind.

We were told that donations up to ?20 did not need to be identified by separate donor, but we had to state to Prism that they were all under ?20 when sending the money.

Those donations were separate to the ticket money. Tickets weren't eligible for GiftAid, but donations were.

WeGotTickets also made a donation - a percentage of the booking fee.

We sent Prism and Help Refugees a detailed breakdown of all the money streams, including also proceeds from a raffle with donated prizes.

ETA: There was also a donation button at the point of online ticket sales, as we asked people to give anything they could spare over and above the ticket price, but that money went straight to Prism/Help Refugees

[offspinner]

dbboy might like to look at the Charity Commission web site, which has loads of (?too much) information:

https://www.gov.uk/topic/running-charity/setting-up

[dbboy]

Thanks, the whole point of the question was to highlight, if organisations that raise money for something that IMO, does not legally exist, if they need to maintain accounts, and if those accounts can be scrutinised.

[Sue]

dbboy Wrote:

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> Thanks, the whole point of the question was to

> highlight, if organisations that raise money for

> something that IMO, does not legally exist, if

> they need to maintain accounts, and if those

> accounts can be scrutinised.

I don't know how many people attended the recent benefit which I think we are talking about, but I wouldn't have thought the amount of money raised or what it was used for warranted any official scrutiny in the great scheme of things. Though if I was a supporter of the organisation concerned, I would want to know where the money had gone.

My understanding was that the benefit was to pay for printing and other publicity costs (plus apparently a donation to Resonance FM Radio or whatever it's called).

We (The Goose Is Out!) had 5000 double sided A5 flyers with colour printed on 350gsm card with a silk finish, and including delivery by courier paid only ?150.

So you'd only need fifteen punters paying a tenner each (or ten paying fifteen pounds each) to cover that. And their postcards were A6, half the size of ours.

If they've registered a domain name for their website, they'd have to pay for that, too, but that's very little if you use the right people.

[dbboy]

You nailed it, I think ANY organisation however small or large that collects money should be legally required to account for all the money collected/given/donated to it and show how and for what the money is used.

[Sue]

dbboy Wrote:

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> You nailed it, I think ANY organisation however

> small or large that collects money should be

> legally required to account for all the money

> collected/given/donated to it and show how and for

> what the money is used.

And if it's not at present a legal requirement, surely the organisers have a moral duty to let their followers/paying audience know exactly where their ticket money and/or donations went?

[dbboy]

Yes, quite right.