OPERATIONAL GUIDANCE

CHARITY INCOME RESERVES

FUND-RAISING

OG 43 B3 - 24 May 2000

Divisional responsibility

For information:

Charity Support Division

Contents

1. Charity's responsibility
2. When might we become involved?
3. When might evaluation be appropriate?

Meaning of expressions - list of Glossary terms used in this Guidance
Index to further related information

1. Charity's responsibility

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.

If a charity is widely believed to have large reserves appeals for further funds may provoke resentment against the charity for apparently seeking funds which it 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.

The above is based on CC19 (paragraphs 51 and 52). A charity's fund-raising policy is largely a matter for the judgement and good sense of individual charities provided that they operate within the law.

2. When might we become involved?

We might become involved if:

• we receive complaints from members of the public - perhaps concerning a high profile charity or after the question of reserves has been highlighted by the media;

• we have reason to query a charity's level of reserves - its fund-raising practice and policy may be a factor in our discussions;

• exceptionally an appeal might be so seriously misleading or so materially incorrect - particularly when allied with other issues of concern - as to warrant the opening of an inquiry.

Generally a member of the public who complains about the content or tone of an appeal should be advised to take the matter up with the charity concerned. Public pressure is likely to be a potent force in persuading a charity to modify its strategy: no charity will want to alienate potential or existing donors.

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. (But check the CDB Register Display screen "Scrutiny of charity" first - CDD may already have taken action or decided that action is unnecessary.)

3. When might evaluation be appropriate?

Evaluation is likely to be appropriate only where:

• we have taken up this issue with the charity in the past but it is refusing to follow our advice;

• 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;

• the appeal is one of several factors causing concern about the charity.

The following words and phrases are defined in the Glossary of Terms:

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CDB
CDD
governing document
reserves
trustees

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