Disaster appeals: Attorney General's guidelines (CC40)

(August 2012)

Disaster appeals: Attorney General's guidelines (CC40) Find out how to run effective disaster appeals and how you contribute to disaster relief efforts

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A. Introduction
B. How individuals can help after a disaster
C. Existing charities responding to a disaster
D. Planning a disaster appeal
E. Running a successful appeal
F. Avoiding fraud
G. Checklist for applying to register a charity for disaster relief
H. Sources of further information
- H1. Charity Commission guidance
- H2. Other organisations and resources

A. Introduction

A1. About this guidance

In the event of a disaster or other humanitarian crisis, the public's natural reaction is to do everything possible to help as quickly as it can. Charities registered in England and Wales not only perform an important role in providing material and practical assistance in the aftermath of a disaster, but also operate as a channel through which the public can support those affected by the disaster.

Disaster appeals attract generous public support and often have a high public profile. Because of that, it is important that charities are clear about the aims of any appeal for donations and can demonstrate openly and transparently to the public that they have used them in accordance with the appeal's aims and in the most effective and efficient way possible.

This guidance is intended to help charities and individuals run disaster appeals legally and effectively so that people affected by a disaster can receive the help they need. We have also described ways in which individuals can contribute to disaster relief efforts - for example, volunteering their time and skills - as an alternative to setting up a new charitable appeal.

A2. Who should read it?

This guidance provides advice for:

established charities wanting to raise funds in response to a disaster; and
individual members of the public who want to help.

We have identified the requirements of charity law and good practice recommendations that apply to running a disaster appeal. It is also important that individuals have the information they need to make a choice about the best way to help after a disaster. We set out the options available to them and also what problems might arise and how to avoid them.

The key areas covered are:

the options open to individuals
how existing charities can respond to a disaster
how to plan a disaster appeal
running an effective appeal
how to manage the risk of fraud
sources of useful information.

A3. 'Must' and 'should' - what we mean

In our guidance, where we use ‘must’ we mean it is a specific legal or regulatory requirement affecting trustees or a charity. Trustees must comply with these requirements. To help you easily identify legal or regulatory requirements we have used the symbol next to the short answer in that section.

We use 'should' for items we regard as minimum good practice, but for which there is no specific legal requirement. Trustees should follow the good practice guidance unless there is a good reason not to.

A4. What has changed from our last guidance?

This guidance updates and expands on the information given in the previous version, Disaster Appeals: Attorney General's Guidelines (CC40). This version aims to set out clearly the options for individuals who want to support disaster relief efforts, and to explain the requirements of charity law and good practice recommendations for existing charities. It looks in detail at issues such as the planning, running and supporting of appeals, and the managing of the risk of fraud.

There is no change in Charity Commission policy.

A5. Some terms used in this guidance

The 1992 Act is the Charities Act 1992.

The 2011 Act is the Charities Act 2011 (which consolidates the Charities Act 1993 and the Charities Act 2006).

The 1994 Regulations are the Charitable Institutions (Fund-Raising) Regulations 1994.

A charity's activities are anything it does using the assets or resources it owns or that are under its control to further its charitable aims. This includes all of its work and services.

Aims and charitable aims mean the aims which the charity is set up to achieve. The aims are usually expressed in a charity's governing document.

Beneficiary or beneficiaries: This is a legal term for a person or group of people eligible to benefit from a charity's work. A charity's potential beneficiary group will be defined in the charity's governing document. Beneficiaries may sometimes be called clients or service users.

The governing document means a legal document setting out a charity's aims and, usually, how it is administered. It may be a trust deed, constitution, memorandum and articles of association, conveyance, will, Royal Charter, scheme of the Commission or other formal document.

Restricted funds are funds subject to specific trusts that fall within the wider aims of the charity. Restricted funds may be restricted income funds which are spent at the discretion of the trustees in furtherance of some particular aspect of the aims of the charity (such as appeal funds), or they may be endowment funds where the assets are required to be invested or retained for actual use rather than spent.

Risk is used in this guidance to describe the uncertainty surrounding events and their outcomes that may have a significant impact, either enhancing or inhibiting any area of a charity's operations.

Trustee means a charity trustee. Charity trusteesare the people who are responsible for the general control of the management of the administration of the charity. In a charity's governing document, they may be collectively called trustees, the board, managing trustees, the management committee, governors or directors, or they may be referred to by some other title.

B. How individuals can help after a disaster

After a disaster, concerned members of the public often contact the Commission asking how to set up a disaster fund which, in many cases, could be a charity. Starting and running a charity comes with legal responsibilities and duties and is not the only, or necessarily the best, way to proceed. In this section, we outline some of the different ways individuals can support disaster relief efforts.

B1. How can I help?

There are several ways you can help in the event of a disaster. Most people choose to help by giving money, but other options include:

fundraising for a charity
volunteering for a charity
starting a new charity (see section B4)
starting a non-charitable fund (see section B5).

Each option has different advantages and disadvantages so you will need to carefully consider which the most appropriate is based on:

the nature and location of the disaster
what other charities and organisations are doing
what kind of help you want to give
the time and expertise you have to offer.

B2. How do I start to fundraise for an existing charity?

The short answer

Get in touch with the charity. We strongly recommend that you check with the charity before you raise funds on their behalf to find out whether there are any legal requirements that apply to your proposed method of fundraising. It is also a good idea to look at charities' websites as they often have supporter pages containing useful information for supporters.

In more detail

There are different laws and regulations that apply to some methods of fundraising. Most charities will be able to provide you with advice to help you comply with charity and fundraising law, and their fundraising team may be able to give you tips and support. Alternatively, you can also seek help from the Institute of Fundraising who can provide information on good practice for fundraisers. Our own guidance, Charities and Fundraising (CC20), aims to help charities and fundraisers work in a way that complies with legal requirements and good practice.

B3. Can I start fundraising and decide which charity to donate the funds to later?

Yes, but this may mean that you will create a separate charitable appeal. If you run a fundraising appeal:

for aims that could be interpreted as charitable; and
you do not specify the charity or charities that you want to support.

You will hold the funds on trust to apply them for the charitable aims set out in the appeal with you as the trustee. This might be the case even if it was not your intention. Holding funds on such a trust carries with it certain duties and responsibilities that you should understand.

B4. What will starting a new charity involve?

The short answer

Starting a new charity comes with specific duties and legal responsibilities and you should be aware of what they are before you decide to go ahead. You should also bear in mind that there will be existing charities already carrying out disaster relief work who would greatly value your support. Supporting such charities would be an effective alternative to starting your own charity.

In more detail

Before starting a new charity, we recommend that you research the charities that already carry out the same work as you are interested in. You might decide that to support one of these is the best way forward - alternatively an existing charity will be able to advise on how a new charity can complement and support work already being carried out. You can find information about over 160,000 registered charities in England and Wales on our Register of Charities.

A charity comes with responsibilities, particularly for its trustees, so starting a new charity needs careful thought and proper advice beforehand. You must make sure that an appropriate legal structure is put in place and that your charity meets its legal obligations in both fundraising and how funds raised are subsequently used and accounted for.

Our website guidance contains detailed guidance on what a charity is and how it should be set up and run.

A charity must be set up only for charitable purposes - this means that a charity must:

have an aim or aims which the law accepts as capable of being charitable
be able to show that the aim is for the public benefit
not be set up for a political purpose; and
be independent - in other words, its trustees must be able to decide what the charity does with its funds without direction from other people or organisations.

As a trustee, you will have and must accept ultimate responsibility for directing the affairs of the charity and ensuring that it is solvent, well run and delivering its charitable aims for the benefit of the public. Trustees must exercise reasonable skill and care in carrying out their duties to ensure that they:

comply with the law (including charity law)
act in the interest of the charity
comply with their duties of care and prudence
maintain control of the charity's funds, keep proper financial records and ensure that funds are used properly, lawfully and only to further the charity's aims.

B5. How do I set up a non-charitable fund?

The short answer

We recommend that you take professional advice about whether your proposed fundraising will be charitable or not. A common example of a non-charitable fund is where funds are raised for the benefit of a particular person and they can only be used for this person. In this case, the funds will not have been raised for the public benefit, will not have charitable aims and so will not be charitable within the law.

In more detail

If funds raised are for a non-charitable purpose, they will not be subject to charity law or the jurisdiction of the Charity Commission. This means that you will have greater freedom and independence in spending the funds.

However, there are some disadvantages to fundraising for a non-charitable purpose:

non-charitable funds do not qualify for the same tax reliefs as charitable funds do
such fundraising appeals must not be represented as charitable and may not therefore attract the same level of support as charitable appeals
it is a criminal offence to say that you are collecting for a charity when you are not. In addition, if the appeal implies that the funds are to be raised for a charity, the funds may be deemed to be charitable whether that is your intention or not.

If you are thinking about setting up a non-charitable fund, you should consider taking professional advice so that you do not set up a charity if you do not intend to. There is free guidance on legal structures which include non-charitable funds available from Get Legal or Companies House.

We are only able to provide advice and guidance for charities.

B6. How can l become a volunteer for a charity?

Find out from the charities responding to the disaster what they are doing and what they will need from a volunteer - the Register of Charities provides contact details for all charities registered in England and Wales. Charity websites will usually describe what volunteering opportunities they have and how you can apply.

There are also many organisations that exist to match volunteering opportunities with interested individuals. These are most easily accessed through the internet. The Institute of Fundraising has links to websites where you can look for information on volunteering.

C. Existing charities responding to a disaster

Many charities will want to know whether and how they can respond to a disaster or humanitarian crisis. A charity must apply its funds for the aims it was set up to achieve, but this need not mean that they cannot help when a disaster happens. This section looks at what charities need to think about when considering and planning a response to a disaster.

C1. Can our charity help?

The short answer

This will depend on the aims of your charity, as well as the way you can practically further those aims. This will be for the trustees to decide taking into account:

the aims your charity is set up for
your charity's capacity to respond
whether other charities are better placed to respond to this particular disaster and any advice they have to offer.

In more detail

Your charity will have been set up with particular aims decided by its founders. These are set out in its governing document, and the charity must operate within these boundaries. However, see C3. Your charity's trustees have the discretion to decide what work the charity can do that will fall within its aims, and they can be imaginative and innovative in deciding what that is.

Where there are restrictions, for example working within a defined geographical area or working with or raising funds for particular types or classes of beneficiary, your charity must comply with them.

It is the trustees' duty to ensure that their charity's funds are used in accordance with its aims and in the charity's interests. So, if your charity does not realistically have the capacity to deliver services in the disaster area, you should focus on raising funds and passing them to a charity already working in the field.

By raising funds and passing them on to another charity, you will both avoid the possible duplication of services, responsibilities and administrative costs of setting up a new operation and make the best use of funds raised. Alternatively, your charity could support the efforts of other charities by redirecting donors to them, or by running a joint fundraising appeal. Your charity should perform the appropriate due diligence checks before passing funds to or working with other organisations and individuals (see section D4).

If raising funds for disaster relief efforts does not fall within your charity's aims, then members of the charity can still give directly, or organise collections in a personal capacity. If this happens, the fundraisers should ensure that any collection is not made in the name of or on behalf of your charity. Neither should these funds be moved through your charity's bank account.

These are some practical examples of how charities set up with different aims might help in disaster relief efforts:

Example 1 - An educational charity

A charity has the aim of providing a school for the advancement of education, and its primary purpose is the provision of education to the pupils at the school. Beyond the curriculum offered by the school, it offers other activities including fundraising carried out by the pupils for other charities, some of which operate internationally.

The trustees consider such fundraising to be an educational benefit to the pupils related to the overall educational aim of the school.

Example 2 - A faith based charity

A Christian media charity has been established to change lives for good in spiritual, moral, ethical and practical ways which reflect and demonstrate the Christian faith. Its overall aim is the advancement of religion.

The promotion of, and fundraising for, other organisations for the relief of need is also be an expression of religion and falls within the advancement of the Christian faith. This means that relief need not be restricted to beneficiaries who are Christians or to organisations set up to promote Christianity.

Example 3 - A village hall

A village hall charity for the benefit of the inhabitants of a small village wants to contribute to an appeal run by an international charity in response to an overseas disaster. As the aims of the charity are clearly limited to benefiting the inhabitants of this particular village, it is not within the aims of the charity to contribute its funds to the appeal.

However, the charity decides to let its premises be used for a fundraising bazaar organised by local inhabitants. The organisers make it clear that all the proceeds are to be donated directly to the disaster appeal. This means that the charity will be reimbursed for any expenses incurred by hosting the event.

C2. Can our charity raise funds in collaboration with other charities?

The short answer

Yes. Your charity can collaborate with other charities in raising funds as long as the purpose of the collaboration furthers your aims. Unless your charity and your partners are fundraising to support your own disaster relief activities, funds raised will normally be passed over to an established charity or other organisation working in the field.

In more detail

Any type of collaborative working between charities can have significant advantages, particularly in keeping down costs and the sharing of resources and knowledge. We encourage working together where it enables charity funds and resources to be used more efficiently and effectively. Our website contains detailed guidance on all aspects of collaborative working. However, a charity must be able to justify any collaboration or joint working arrangement as being in support of its aims and being in the interests of its beneficiaries.

The principles that apply to a collaboration between charities for the purposes of raising funds in response to a disaster are very much the same as apply to any other form of charity collaboration.

Any fundraising collaboration:

must be in the interests of your charity's beneficiaries
must further your charity's aims
should be subject to a written agreement between all parties to the collaboration.

The written agreement referred to in the list above should set out the practical details of the partnership. These will usually include:

what the purposes of the collaboration are
whether the funds raised will form a separate charitable fund
how the collaborating organisations' funds and resources will be used
establishing the processes, roles and responsibilities for administering the funds raised
what will be done with any surplus funds
how long the collaboration will last for
the accounting and reporting arrangements.

Where a collaborative fundraising appeal involves charities and non-charitable partners, the funds raised might need to be established as a new charitable fund to be used for the purposes of the appeal. This will mean that you and your partners will be setting up a new charity with all that entails (see B4), and which may have to be registered as a charity.

Otherwise, the appeal literature can make it clear that all funds raised will be passed to one or more other named charities to use for their own work in the field.

In any case, a collaboration for fundraising purposes will need to make it clear to donors what their gifts will be used for and how they will be applied.

C3. Can our charity change its aims in order to respond to a disaster?

The short answer

It may be possible to change or widen your charity's aims. In most cases, you must have our prior authorisation.

In more detail

We will usually need to authorise any changes to a charity's aims. This means that you should be able to show that any proposed change is in the interests of your charity and its beneficiaries. See Changing your Charity's Governing Document (CC36) for more information.

For example, a charity with aims specifically restricted to a local area cannot usually operate or use its funds for an aim outside of its defined area. Your trustees could apply to us for consent to widen the area your charity can work in. However, such a change would be significant and your charity should consider the long term impact of changing its aims, especially the effect it would have on your charity's current and future beneficiaries. It is also important to bear in mind that such a change is relatively complex and may take some time.

D. Planning a disaster appeal

Disaster appeals need careful planning. They are bound by the same legal requirements as any other fundraising appeal and trustees should take particular care that they are clear about the rules. They should also consider good practice recommendations and advice - there are a number of useful resources listed at the end of this guidance.

D1. How can our charity prepare for an appeal?

The short answer

Whether your charity wants to raise funds for its own disaster relief work or intends to support the work of other charities if a disaster happens, it is important to have contingency plans in place. Given the urgent need for relief, there will be an expectation that funds raised will be applied quickly and proper planning can ensure that this happens.

In more detail

Any plan should cover basic issues such as:

identifying the rules and regulations governing appeals and fundraising
deciding whether appeals will be to fund your own relief efforts (if appropriate) or whether you will be fundraising for other existing charities or organisations working in the affected area
what the basic terms of any fundraising appeal might be
how an appeal might be publicised
what other fundraising activities your charity might organise
whether you want to collaborate with other partners in any appeal and, if you do, how you will work together.

In the event of a disaster, the basic plan can be developed and refined to take into account the nature, scale and location of the crisis. Knowing what your charity is planning to do with the funds and what practical steps will be needed to carry out those plans is essential for setting targets for the amounts to be raised and how long the appeal will last.

If your charity doesn't realistically have the capacity, expertise or local presence necessary to provide practical disaster relief, it will be more effective to work with and raise funds for another charity with similar aims that does. If the funds raised by your appeal are simply to be passed to another charity, it might be possible to identify a suitable recipient beforehand so that funds can be passed over as swiftly as possible.

Your charity might also want to consider passing the funds raised by an appeal directly to a charity or other organisation working in the disaster area (see section D2).

Section H lists a number of useful sources of further information on all aspects of disaster relief.

D2. How important is risk management when planning an appeal?

The short answer

It is essential to identify and plan for the management of potential risks when planning any response to a disaster. However, there are particular risks associated with running an appeal that need to be considered. A robust risk management process will help you ensure that:

you have thought about what risks (big and small, likely and less likely) there might be
you have planned for how they might be managed
you improve your forward and strategic planning; and
your aims are successfully achieved.

In more detail

Each charity will face different types and varying levels of risk and will have different capacities to absorb or tolerate those risks. Appealing for funds may only be a small part of your charity's disaster relief work and this might mean that your risk management process will need to extend to the risks attached to the actual delivery of practical aid on the ground.

However, this guidance is concerned with starting, running and supporting successful disaster appeals, and risks associated with appeals are likely to include:

raising too much or too little money
inability and lack of capacity to cope with the volume of donations
the terms of the appeal are open to misinterpretation or misunderstanding
failing to balance the cost of raising funds with the actual funds raised
inadequate financial controls in place.

If your charity intends to raise funds with the intention of sending them directly to charities or NGOs working in a disaster area, it is vital that you recognise and plan for the management of any potential risks that might be associated with operating in particular areas.

Your charity should, as part of the risk management process, ensure that before it commits to passing over any funds to other organisations or individuals, it carries out adequate due diligence checks on them The aim of these checks will be to satisfy your charity as far as possible that they are legitimate and appropriate partners for you to work with, and will deliver the charitable aid that the funds have been raised for.

See our guidance Charities and Risk Management (CC26) for a more detailed look at risk management generally.

D3. What should we do to manage funds raised effectively?

The short answer

If you are fundraising to pass funds to an existing charity or other organisation, the process of distribution of funds should be relatively straightforward (but see D2).

If you are raising funds for your own disaster relief work or will be responding to applications for funds from organisations or potential beneficiaries, you should ensure that appropriate governance measures have been put in place for the proper distribution of those funds.

In more detail

For charities that will be dealing with applications for funds from organisations and potential beneficiaries themselves, it will be important to consider the following questions:

do your existing trustees and personnel have the skills and experience to be able to distribute the funds effectively?
will you be able to employ extra staff or recruit trustees with particular skills if necessary? Handling and accounting for large sums of money can be challenging, especially where donor expectation is likely to be especially high.
have you contacted administrators of previous appeal funds to learn from their experiences and advice?
how will you deal with applications for funds? Have the trustees decided on eligibility criteria and when they will (or will not) approve applications?
how will applications be made? If by a form, have you considered diversity issues, for example. translation services?

D4. What should we do to make sure (and show) that funds we have raised are used properly?

The short answer

Trustees have a legal responsibility to ensure that funds raised are used for the purposes for which they were raised. This means your charity should consider putting in place a range of checks and controls to safeguard its funds and prevent fraud.

In the interests of openness and transparency, your charity should also be able to demonstrate to donors and the general public that funds raised have been, and will be, used for the purposes they were given. Disaster Action's Guidance on Management and Distribution of Disaster Trust Funds is a useful source of information.

In more detail

Your charity should draw up and put in place policies and procedures for the protection of its property - what is appropriate will depend on your charity's size and activities.

A significant aspect of a trustee's legal duty is to protect charitable assets. Before your charity commits funds and resources, we strongly recommend that you carry out appropriate due diligence checks on:

people and organisations that your charity passes funds to
people and organisations that your charity receives funds from
people and organisations that you will be working with

After your charity has committed funds and resources, you should monitor and evaluate a project or the use of a grant. This means that your charity should have processes and procedures in place to examine and demonstrate:

how efficiently the resources were used
how successful it was in achieving its aims
how it selected beneficiaries and projects

The results of monitoring and evaluation will also enable a charity to demonstrate to donors how the funds they have given have been used and that they reached the intended beneficiaries. It is important for the future work of charities in general that the public has confidence that their donations will be used properly and in accordance with the terms of any appeal. Monitoring and evaluation will also enable your charity to learn from its experiences and to improve its future performance.

It is important for your charity to recognise that there will be a range of expectations from donors, and clarity about the aims of the appeal and the effectiveness of your charity may help to prevent potential conflict and frustration. Information on the following issues might be helpful to donors:

the capability of your charity to either distribute funds properly or to carry out relief work itself
your charity's commitment to ensuring that staff are properly trained and that trustees have the appropriate skills and experience
the terms and criteria applying to any grants made to individual applicants (if applicable)
communicating as far as possible to donors how funds raised have been used
how long the fund will exist for and how it will close.

E. Running a successful appeal

Charities act as a valuable and speedy channel for donations from the public and, because they are charities, the public can see what has been done with their money. This section sets out the legal and good practice points that apply to running a successful appeal.

E1. What are the key points to remember when appealing for funds?

The short answer

Disasters require quick responses but there are a number of legal and good practice issues which your charity will need to consider. It is important that the appeal:

clearly identifies your charity and what it does
makes it clear what the funds will be raised for and how they will be used
lets the public know how to donate to the appeal
explains the gift aid arrangements
says what will happen to any surplus funds
says what will happen if not enough funds are raised.

In more detail

Listed below are some key points for charities to consider when raising funds.

Your charity must:

ensure all fundraising material clearly identifies your charity and includes your registered charity number. Apart from being a legal requirement for charities with an annual income of more than £10,000, this will ensure that your appeal is not mistaken for a fraudulent appeal
keep accurate and comprehensive records of donations
account separately for disaster appeals to make sure that you keep accurate financial records

Your charity should:

set the terms of the appeal widely enough to deal with raising too much or too little money (see E3, E4 and E5)
keep donors informed about how funds given are being used
consider a joint fundraising effort (see C2) if there are other charities with similar aims raising funds for the same purpose as you

The Institute of Fundraising sets out good practice principles for fundraising generally and its website is a useful source of information on different forms of fundraising. See the Institute's Codes of Fundraising Practice for more information. The Institute has published a separate code of practice that deals specifically with the important issues of being accountable, transparent and clear when raising funds.

E2. What about communicating with the public?

The short answer

If you are raising funds to make grants to individuals or organisations, you should let the public know who can apply for funds, what the application criteria set by the trustees are and how potential beneficiaries can apply.

If you are passing funds to another charity or organisation, it is important to make sure that your donors know the details so that they can follow the progress of the relief effort and see how their funds have been used.

In more detail

It is helpful to let the public know:

how donations can be made
your contact details
the immediate and continuing needs of those affected by a disaster
which potential beneficiaries can apply for assistance
the details of the appeal and how potential beneficiaries can apply
what the trustees' criteria for applications are
the progress of any relief effort and how funds are being used.

E3. How should we word the terms of our appeal?

The short answer

The wording should make it clear how funds raised by the appeal will be used. It is also helpful to include any other information that may give donors confidence about the use of the funds.

The appeal's wording should also include other or secondary purposes that will make it clear to donors what will happen if too much or too little money is raised by the appeal.

In more detail

It is important that potential donors can easily understand how their money will be used. The terms of the appeal should therefore make clear:

the purpose of the appeal - in other words, what the money will be used for
who is organising the appeal
what the target of the appeal will be - this might be a time target or a financial target
how donations can be made
what deductions will be made for expenses
any secondary purpose of the appeal.

Being clear about the purpose(s) of the appeal is particularly important and it is worth giving careful thought to their wording.

If the purpose specified in the appeal cannot for some reason be achieved, or you raise too much or too little money, it can present difficulties which can only be resolved by the formal and often time consuming processes described in E4 and E5.

Where only a single purpose has been specified, there is a higher risk of the charity either not raising enough funds to carry out that purpose or having funds left over which cannot be used for any other purpose.

If a charity appeals for twin or multiple purposes, each purpose has equal priority. The advantage of this is that it gives more flexibility in applying the funds, the disadvantage is that it might dilute the strength of the appeal to the public.
Alternatively, a charity might have a primary purpose for the appeal but also makes provision in the appeal literature for:

what happens to funds raised after the primary purpose has been achieved; and
what happens to funds if not enough is raised to carry out the primary purpose.

In this guidance we describe this as a having a secondary purpose. It differs from having twin or multiple purposes because the priority is to apply money to the primary purpose. The advantage of this is that there will be a clearer focus for the public on what they're giving their money for.

Examples of purposes

1. A single purpose

'providing emergency shelter for those affected by the X disaster'

In this case, if there is money left over or you raise too little to achieve this purpose, your charity would need to go through a formal process to allow those funds to be used for any other purpose.

2. Twin purposes

'providing emergency shelter and more generally relieving the needs of those affected by the X disaster'

In this case, the funds raised could be used for either or both of the purposes.

3. A secondary purpose

'to provide emergency shelter for those affected by the X disaster. Once this aim has been achieved, or not enough money is raised to carry out this aim, any surplus or unused funds will be used for our charity's general aims including other disaster relief projects we are involved in'

This wording sets out how funds will be used if there are any left over after providing all the emergency shelter that is needed, or not enough money is raised. You will need to decide how you will know whether the primary purpose has been achieved. This secondary purpose would result in any remaining funds being used for the wider aims of the charity that is running the appeal.

E4. What must we do if we raise too much money?

The short answer

This will only be a problem if there is no other purpose specified in the appeal for which you can use funds raised (see E3). If there is, simply use the surplus money accordingly. If there is a problem, the advice below should help.

In more detail

When the purpose of the appeal is met but there are surplus funds and the appeal did not specify what would happen to them, a scheme or other legal authorisation might be required to enable the money to be used for other similar charitable purposes. For further information see Charitable Appeals – avoiding and dealing with failure (OG53).

If your charity's activities and expertise may realistically be limited to the provision of, for example, emergency accommodation and medical supplies and you have raised enough for these aims but there are still surplus funds, this is not necessarily a problem. If the terms of the appeal have been worded to cover wider aims than your charity can effectively provide, the surplus funds can still be used because it will be possible to pass the surplus to another charity that is providing different kinds of emergency relief to those affected by disaster X.

E5. What happens if we don't raise enough money?

The short answer

Even though the funds raised might be less than you hoped for, if they can be applied consistently with the aims of the appeal (even if not on the same scale), they can still be used.

However, if the amount raised is simply not enough to achieve the appeal aims in any way at all, the law requires certain procedures to be followed.

In more detail

When wording the terms of any appeal for funds, it's important that you consider describing its aims in a way that is broad enough to allow sufficient flexibility in how the funds can be used. You can also consider including another or secondary purpose (within your charity's aims) to which funds could automatically be applied if they are not sufficient to be used for the original purpose of the appeal (see E3 on the wording of appeals).

If insufficient funds are raised and they cannot be used for the aims of the appeal (or any secondary purpose), it is the trustees' duty to try to return any unused funds to any donors who can be identified. After this has been done, the trustees must apply to us for a scheme allowing any remaining funds to be used for similar purposes by your charity. For further information see Charitable Appeals – avoiding and dealing with failure (OG53).

E6. Should we ask for or accept donations of goods?

Your charity should only ask for or accept donations of goods where it has decided that it would be a practical, cost-effective and appropriate way to respond to the needs of disaster victims.

For charities and their beneficiaries, it can often be more effective to transfer funds rather than goods to the affected area. Your charity might want to ask potential donors to sell unwanted items and donate the proceeds to the appeal, or to accept unwanted items and then sell them to raise funds as long as this intention is made clear to the donors.

E7. When should our charity close our appeal?

Before launching an appeal, you should have decided on a closure target. This date and any other details about closure should be included in the appeal literature. This closure target could be:

a financial target
a specific date
how you will determine that the aims of the appeal have been met.

and it should take into consideration:

whether you are passing all funds raised to another charity or aid organisation
whether any recipient of your appeal funds has specified how much will be needed to deliver a particular aim
if you are involved in the delivery of aid, the needs of the beneficiaries - are you looking at immediate or longer-term relief?
the cost of delivering a disaster relief programme
a deadline for when the last donations will be accepted
claiming Gift Aid and the time it will take for claims to be processed.

F. Avoiding fraud

Because of the range and diversity of charitable activity, there is no single method of financial control that will protect all charities from fraud and other types of financial crime. Charity trustees have a duty to make sure that their charity's funds are protected, properly used and accounted for and this means that they will have to use their knowledge and judgement to decide how best to safeguard their funds.

F1. How might we be at risk?

The short answer

Because of the high level of public trust and confidence in charities, some people seek to take advantage of this and can use a variety of methods to divert funds raised for charitable purposes for their own personal gain.

In more detail

Common types of fraud you should be aware of are:

websites that mimic a legitimate charity's website in order to gain access to a donor's bank account or divert funds donated away from the charity
emailed fundraising appeals that direct donations to personal bank accounts using a legitimate charity's name and logo, or a fake charity name that sounds legitimate
setting up websites and appeals for funds with a fake charity name that sounds like a well-known charity
fundraising events where very limited amounts (or none) of the funds raised are passed to the charity itself
using a charity's online donation processing systems to test stolen credit card numbers
using charities as a way to launder money - the risk of this is higher when funds are transferred overseas.

Charities can also be vulnerable to fraud and other abuse from partners or persons working or volunteering for the charity. Our guidance Internal Financial Controls for Charities (CC8) and Charities and Insurance (CC49) might be of help here.

If you discover or suspect fraud, report it to the Police and the Charity Commission immediately. More information can be found in our Compliance Toolkit, in particular Chapter 3: fraud and financial crime.

F2. How should we protect ourselves against fraud?

The short answer

Your charity should draw up and put in place policies and procedures for the protection of their property - what is appropriate will depend on the size and activities of the charity.

Our guidance Internal Financial Controls for Charities (CC8) and the Compliance Toolkit set out our recommended good practice measures - there is also a self-assessment checklist which will give trustees an idea of the key areas to look at.

In more detail

Charities using funds in areas affected by disasters will face different risks of fraud and other financial crime, chiefly because they may not be operating in stable physical and financial environments. In addition, disaster appeals are sometimes vulnerable to the types of fraudulent activities described in F1.

If your charity is operating in areas where the physical and financial infrastructure is affected, it may need to rely more on cash transfers or the use of financial intermediaries. This might mean that it will be challenging to maintain the same standards of transparency and accountability as expected of charities operating in less difficult situations, but it is important that you try to do so. Our guidance Charities Working Internationally and the Compliance Toolkit has more detailed information on this subject.

In the Compliance Toolkit there is a detailed checklist describing anti-fraud measures which your charity might find useful. This list is a summary of the key action points for your charity:

put in place robust financial controls and governance measures
develop a fraud risk assessment process to assess the risks that a charity of your size, structure and activities might be exposed to
train your trustees and staff to be aware of and identify potential fraud and risks
restrict and closely monitor access to sensitive information
establish authority levels for placing orders and approving payments which are clear and preferably documented;
reconcile bank statements and other accounts on a regular basis, carry out spot-checks on books and records
periodically audit financial processes and procedures
develop and implement an anti-money laundering policy
record suspected and confirmed instances of fraud - this could help your charity spot emerging patterns and identify risk areas. If losses have already happened, it will help measure them and build an evidence base
plan what to do if fraud occurs.

F3. What happens if an appeal is being run using our charity's name without our permission?

The short answer

You should contact the people running the appeal and, depending on the situation, either enter into a formal agreement with them or ask them to stop.

In more detail

In many cases, an appeal may have been launched by a well-meaning member of the public who intends to donate the funds raised to your charity.

They are probably not aware that there are strict laws surrounding fundraising and they haven't contacted your charity prior to raising funds on your behalf.

If this does not turn out to be the case, the 1992 Act and the 1994 Regulations enable charities to seek an injunction restraining someone from raising funds in the charity's name where:

the fundraiser is using methods to which the charity objects; or
the fundraiser is not a fit and proper person to raise funds for the charity; or
the charity does not wish to be associated with that fundraising venture.

At least 28 days before seeking an injunction, the charity must give notice in writing to the fundraiser stating that:

they object to the fundraising on the charity's behalf
they have objections and what they are
they wish them to stop; and
if the fundraiser does not comply with the notice, the charity will seek an injunction.

If the fundraiser does not cooperate, and you suspect he or she may be involved in fraudulent activities, report them to the Police and the Charity Commission.

Part of our role as Regulator is to keep the public informed about issues that affect the proper use of charitable funds and we run media and public awareness campaigns to let people know how they can spot, avoid and report fraud.

G. Checklist for applying to register a charity for disaster relief

If you have decided to apply to register a disaster fund as a charity with the Charity Commission, the checklist below will help us process your application quickly.

apply online on the Commission's website
ensure that your aims are charitable and for the public benefit
ensure you have all your paperwork ready, including your governing document and signed trustee declarations before you apply to register
to make the process run as smoothly as possible, use an approved model governing document available from the Commission's website
submit all your documentation together. If an incomplete application is submitted this will delay processing
make a note in the 'special circumstances' section of the application form, that the proposed charity is to be set up to respond to a disaster
send an email to the Commission noting the application to start a disaster relief charity and your application number. This will help the registration team to prioritise your application.

H. Sources of further information

H1. Charity Commission guidance:

H2. Other organisations and resources

There are many sources of information which charities can tap into that provide useful advice and guidance on working internationally. This section offers an overview of what is available, although it is not a definitive list.

British Overseas NGOs for Development (Bond)

BOND is a broad network of voluntary organisations working in international development that is also a registered charity. It aims to improve the UK's contribution to international development by promoting the exchange of experience, ideas and information among BOND members and other UK bodies with an interest in international development.

Regents Wharf
8 All Saints Street
London
N1 9RL

Website: www.bond.org.uk

British Red Cross Disaster Appeal Scheme

The British Red Cross' Disaster Appeal Scheme has offered help and guidance to local authorities across the UK in setting up and administering donations of money received following a disaster or major emergency in the UK.

Website: www.redcross.org.uk

Disaster Action

Disaster Action is a charity that, amongst other things, aims to raise awareness of the needs of survivors and bereaved. Disaster Action's guidance is available on their website and also Disaster Funds: Lessons and guidance on the management and distribution of disaster funds.

No. 4, 71 Upper Berkeley Street
London
W1H 7DB

Website: www.disasteraction.org.uk

The Fundraising Standards Board

An independent body that oversees a transparent and independent regulatory scheme for fundraising, aiming to raise standards and build public confidence in fundraising. Enquiry details for England and for Wales are given on its website.

Website: www.frsb.org.uk

England

Fundraising Standards Board
61 London Fruit Exchange
Brushfield Street
London
E1 6EP

Wales

Fundraising Standards Board
PO Box 564
Swansea
SA8 9AG

The Institute of Fundraising

The Institute of Fundraising is the professional membership body for UK fundraising. Its mission is to support fundraisers, through leadership, representation, standards-setting and education, and it champions and promotes fundraising as a career choice.

Institute of Fundraising
Park Place
12 Lawn Lane
London
SW8 1UD

Website: www.institute-of-fundraising.org.uk

Management Accounting for NGOs (Mango)

Mango is a registered charity that provides financial management services to relief and development operations. Mango publishes guides to accounting for organisations working overseas. Simple introductory guides are freely available from their website. They also run training courses and keep a register of carefully selected finance staff.

2nd Floor
Chester House
21-27 George Street
Oxford
OX1 2AU

Website: www.mango.org.uk

Office for Civil Society

The Office of Civil Society has developed guidance about what information must be provided to the public from professional fundraisers and commercial participators when they undertake a public collection on behalf of a charity.

Office of Civil Society
2nd Floor
Admiralty Arch
South Side, The Mall
London
SW1A 2WH

Website: www.cabinetoffice.gov.uk

HM Revenue and Customs (HMRC)

This department offers advice and information on all tax issues relating to charities and charitable giving. You will also find Guidelines on the tax treatment of appeal funds of help.

HMRC Charities
St John's House
Merton Road
Liverpool
L75 1BB

Email: charities@hmrc.gov.uk
Website: www.hmrc.gov.uk

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