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4.Processing donations

Clear policies and processes for dealing with donations and Gift Aid reduce risk and make sure that charities get all of the money they are entitled to. This section includes standards about handling different forms of payment to make sure donations are secure (this includes one-off payments and ongoing donation commitments). It also includes rules on Gift Aid.

4.1.Cash

In this section, ‘you’ means a charitable institution or third-party fundraiser, unless we tell you otherwise.

4.1.1.

You must not leave unsecured cash unattended.

4.1.2.

You must count cash in a secure place.

4.1.3.

You must make sure that all cash you have collected is counted and recorded by two unrelated people, wherever possible.

4.1.4.

You must make sure that cash donations are placed in a sealed container or collecting box. If you are collecting in Scotland or Northern Ireland, or in a licensing authority which follows the model regulations in England and Wales for street collections, you must do this.

4.1.5.

You must make sure the promoter of the collection (for example, a charity’s fundraising manager) and one other responsible person or an official of a bank are present when you examine and open collecting boxes for licensed collections in a public place. If the licensing authority is following the model regulations in England and Wales for street collections, you must do this.

4.1.6.

For collections on private land, if it is not practical for you to open and count collecting boxes, you must have effective procedures and instructions for the person who owns or manages the site to count, record and bank or deliver the money in the boxes.

4.1.7.

If you do not bank cash immediately, you must put it in a safe or other secure place.

4.1.8.

You must bank cash as soon as possible. To help with this, you must have a procedure for banking donations, including who does it and when.

4.1.9.

You must check that the cash you have banked matches your income summaries, as soon as possible. If possible, someone who is not involved in counting or cashing up the money must do this.

4.1.10.

You must send the charitable institution (or institutions) the full amount taken from all collecting boxes without taking any expenses or fees, unless these have been agreed beforehand.

4.1.11.

If you are a professional fundraiser or commercial participator, you (and people fundraising for you) must not take any money from cash you (or they) receive.

4.1.12.

You must meet any extra rules local authorities set about making deductions from collections.

Further standards for cash collections in Scotland

4.1.13.

In Scotland, for collections licensed by the local council which will be carried out using a collecting box, you must only accept donations by allowing the donor to put them in the collecting box. Or, if the collection can be carried out by sealed envelopes, the collector must only accept donations in sealed envelopes using the numbered envelopes you have issued to them. As a result, it is not usually possible to give receipts for donations.

4.1.14.

If you receive cash in collection envelopes or collecting boxes as part of a public charitable collection, you must count and bank it in line with the Public Charitable Collections (Scotland) Regulations 1984, as amended.

4.2.Tills

In this section, ‘you’ means a charitable institution or third-party fundraiser. 

4.2.1.

You must make sure that all money is put into the till immediately.

4.2.2.

You must only give change from the till, never from your personal money.

4.3.Floats

In this section, ‘you’ means a charitable institution or third-party fundraiser. 

4.3.1.

A person you have nominated must sign for your floats.

4.3.2.

You must keep floats and any money made from sales separate from the cash handler’s personal money.

4.3.3.

If you use money from a float for petty-cash spending, you must record this separately and keep any receipts.

4.4.Receipts

In this section, ‘you’ means a charitable institution or third-party fundraiser.

4.4.1.

If you do not use a sealed collecting box, the collector must issue and sign a receipt for the donated amount.

4.4.2.

If you are collecting on a private site, you must give the person who owns or manages the site a receipt if they ask for one. The receipt should include the address of the site, the box number, the date and the amount collected.

4.5.Cheques

In this section 'you' means a charitable institution or third-party fundraiser.

4.5.1.

You must either bank cheques or send them to your fulfilment house (if you use one) as soon as possible.

4.5.2.

If you are sending cheques to a fulfilment house or external organisation for processing, you must make sure the method of sending the cheque is appropriate to the value of the cheque.

4.5.3.

You must not give change in return for cheques.

4.5.4.

You must not issue a refund for a cheque donation until the cheque has cleared and the money has appeared in your organisation’s account.

4.6.Charity cheques and vouchers

In this section, ‘you’ means a charitable institution or third-party fundraiser. 

Charity cheque and voucher accounts allow donors to make donations as a lump sum or regular amounts into an account which can then be used for making donations to registered charities (but not other charitable institutions). The agency managing the account will claim and add Gift Aid to the donation. The donor is given a book of vouchers or a ‘chequebook’ to donate this money to their preferred charities. On receiving the voucher or cheque, the charity receiving the donation contacts the agency and arranges for the donation to be transferred.

4.6.1.

You must not reclaim tax on the donation (the amount of the charity cheque or voucher) if you are the charity receiving the donation, as the Gift Aid was added before you received it.

4.6.2.

You must bank or cash in vouchers as soon as possible, ideally the next working day, unless the agency issuing the vouchers asks you to do otherwise.

4.7.Card transactions

In this section, ‘you’ means a charitable institution or third-party fundraiser. 

This section applies to transactions both where the donor is present and when they are not. The steps you need to take to make sure payments are secure will vary depending on the number of transactions that are made.

For more standards on processing data, see section 3 Processing personal data (information).

4.7.2.

You must use extra security measures such as Verified by Visa and 3D Securecode for online transactions if you have the resources for this.

4.7.3.

If you are charged for transferring payments, you must record the total donation amount as income, and record the charges in your accounts as ‘expenditure’.

4.8.Direct debits

In this section, ‘you’ means a charitable institution or third-party fundraiser. 

The procedures and rules to do with direct debits will vary depending on the bank you use. The Direct Debit Guarantee Scheme provides consistent standards and protection to customers.

4.8.1.

If you have signed up to the Direct Debit Guarantee Scheme, you must meet its standards.

4.9.Gift Aid

In this section, ‘you’ means a charitable institution or third-party fundraiser. 

Gift Aid allows registered charities to reclaim tax on donations made by UK taxpayers. This effectively increases the amount of the donation.

4.9.1.

You must only claim Gift Aid for a donation if all of the Gift Aid conditions are met. One of these is that a donor's Gift Aid declaration must meet HMRC’s guidance on Gift Aid.

4.9.2.

If you want to make a tax relief claim under the Gift Aid Small Donations Scheme, you must only do so if all of the scheme’s conditions are met.

Further guidance