Guidance

Charity fundraising appeals: using donations when you have not raised enough money or you cannot achieve your appeal purpose

Published 31 October 2022

Applies to England and Wales

If your charity makes an appeal for a specific purpose or purposes, you must use the donations only for that purpose or purposes.

However, you may not receive enough donations to carry out the intended purpose, and/or circumstances may change during your fundraising which mean you are unable to use the donations as you intended. For example:

• an appeal to refurbish a community café has not raised enough money for the refurbishment
• you raised the funds needed for the refurbishment of a community café, but the café closed
• an appeal to restore a historic building is taking significantly longer than planned to raise the funds needed and, in the meantime, it has been decided the building cannot be saved

If this happens, you have donations given for a particular purpose, but you cannot use them for this.

Look at your appeal wording. It may allow you to spend the donations on your charity’s other projects.

If not, you will need to do one or both of the following, depending on the circumstances:

• offer donors their donations back
• follow the required process below to decide a new purpose for the donations, so that you can use them

Donations to an appeal are usually money, but can be property of any kind. For example, goods.

This guidance applies to all charities except NHS charities. If you are an NHS charity, see section 6.8 of NHS charities.

Follow separate rules if your appeal for a specific purpose has raised more than you need.

What to do with donations to your appeal

Follow the steps below if your appeal has not raised enough donations and/or circumstances have changed so that you cannot achieve the purpose of your appeal.

Step 1: Check if your appeal has a secondary purpose

A secondary purpose is wording in your appeal that says how you will use donations if you cannot achieve your appeal purpose.

If your appeal wording includes a secondary purpose, you:

• must use the donations for that secondary purpose
• do not need to contact donors or the Charity Commission

Step 2: Return donations requested by donors

When they donate, donors may say they require their donation to be returned if you cannot carry out the purpose of your appeal. You must contact these donors to return their donation. You can deduct the reasonable cost of processing the return.

However, you can keep the donations for your charity’s other projects if the donor says that you can. Keep a record of their authorisation to use the donation for other projects.

Step 3: Identify donations which are small value, or from cash collections or competitions

You do not have to contact donors about returning any or all of the following donations:

• donations your charity received through a cash collection, such as a bucket collection in a supermarket or a collection plate in a church
• the proceeds of a lottery, competition or other similar fundraising activity
• any individual donation that is £120 or less and where you believe that the same donor has given no more than £120 in total to the appeal in your charity’s financial year (we refer to these as ‘small value’ donations below)

You can decide on new purposes for these donations, but you may need to ask the Commission to authorise this. When you need to do this is set out below.

Step 4: Dealing with remaining donations

You may still have remaining donations after you have:

• returned donations requested by donors (step 2) and
• identified cash collection, competition or small value donations (step 3)

Your starting point is that donors are entitled to a return of their donation.

You may have remaining donations in one or both of the following categories:

• donations that you plan to try to return
• donations that you consider it unreasonable for you to try to return; for example, because of the amount of the donation, its type, or when it was given

What you must do is set out below.

Returning remaining donations

You must ask the Commission for written authorisation for how you plan to contact these donors to offer to return their donations.

Your proposed actions must be reasonable given the circumstances of your appeal. Think about:

• the best ways to contact donors
• how your appeal was made - for example, if you used social media to appeal for donations, you could use the same method to contact your donors
• how long donors will have to claim back their donation

You can match your plan to the amount involved and take a realistic approach.

To apply, email [email protected] and provide the following information:

• the charity’s name and registration number
• the details of your appeal - include your appeal literature
• why you cannot use your donations as intended
• how you will contact donors and how this is reasonable given the circumstances of the appeal
• your name, contact details and role in the charity
• confirmation that you are acting on behalf of the charity

You must then take the actions agreed with the Commission to contact donors about a return of their donation.

Once you have taken these actions, there may be donors you have not been able to find or identify. Their donations can now be applied towards new purposes.

How to decide new purposes and when you need Commission authority for your new purposes is set out below.

Donations that it is unreasonable to try to return

You may consider that it would be unreasonable to try to return some donations because of:

• the cost of the return given the amount of the donation
• the type of the donation, the circumstances in which it was given, or how long ago it was made

You must ask the Commission for authorisation to use these donations for new purposes.

Email [email protected] and provide the following information:

• the charity’s name and registration number
• the details of your appeal, including, your appeal literature
• an explanation of why you cannot use your donations as intended
• why you consider it unreasonable to try and return these donations
• provide supporting evidence of any cost implications and on general steps taken
• your name, contact details and role within the charity
• confirmation that you are acting on behalf of the charity

If you have donations in both categories, you can ask the Commission, in the same email, to authorise your:

• proposed actions for contacting donors to try to return their donations
• decision that it is unreasonable to try to return some donations

For information on how we process your personal data, read the Commission’s privacy notice.

You should be aware that it is an offence under section 60 of the Charities Act 2011 to knowingly or recklessly provide false or misleading information.

Choosing and agreeing new purposes for donations

You can now think about what the new purposes should be for the donations.

When deciding on new purposes, you must have regard to:

• as far as is possible and desirable, whether the new purposes can be similar to the original ones
• the need for the new purposes to be suitable and effective in current social and economic circumstances

Keep a record of any information or evidence that you have used to make your decision.

You must be able to show and explain your reasons if you choose new purposes that are not similar to the original appeal purposes.

But your new purposes also need to be workable now and in the future. Examples of what you should think about are:

• if the needs and situation that prompted your appeal have changed since you made the appeal

• if there are new circumstances that affect who the appeal was intended to benefit

• if there are new circumstances that affect how you work with or support the people, organisations or activities that the appeal was set up for

Your new purposes must be charitable.

You must:

• make a formal decision (a resolution) to agree the new purposes for the donations
• follow the rules in your charity’s governing document to pass the resolution – you must ensure a majority of all your trustees pass the resolution
• keep a written record of your decision, for example in the minutes of your meeting, your reasons for it and any supporting evidence

If the total value of donations you would like to use for new purposes is £1,000 or less

Your resolution becomes effective on the date you pass it. You do not need to contact the Commission.

If the total value of donations you would like to use for new purposes is over £1,000

You must ask the Commission to authorise your resolution. Your resolution is effective on the date the Commission authorises it.

Email [email protected] and provide the following information:

• the charity’s name and registration number
• tell us what your new purposes are
• explain why you have chosen your new purposes and how you have had regard to the 2 points mentioned above
• tell us the value of the total donations you want to use for the new purposes
• send us a copy of your resolution or minutes of the meeting where you agreed the resolution
• confirm that you have followed the rules in your governing document to pass the resolution
• your name, contact details and role within the charity
• confirmation that you are acting on behalf of the charity

For information on how we process your personal data, read the Commission’s privacy notice.

You should be aware that it is an offence under section 60 of the Charities Act 2011 to knowingly or recklessly provide false or misleading information.

We may ask you to advertise your proposals before we consider authorising your resolution. We may also ask you for supporting evidence which you have relied on to make your decision. This is usually if, for example, your new purposes are controversial or very different from the original purposes of the appeal.

You can use our guidance about decision making principles to help you to approach your decisions in the right way.

Funds this guidance does not apply to

Sometimes, you may have funds that do not come from a charity appeal but may have restrictions on their use. Generally you do not need to contact the Commission about these.

Examples include:

• an underspend on a grant
• donations to your charity for a specific purpose where your charity did not appeal for those funds

Contact the donor to discuss next steps.

Getting your appeal wording right first time

Getting your appeal wording right, and keeping good donor and appeal records, will help you avoid difficulties if your appeal does not raise enough money, raises too much money or you are unable to use the donations as intended.

Read our guidance on Charity fundraising appeals: appeal wording and record keeping.

Legal note

These rules are from the Charities Act 2011 (as amended).

The main relevant sections of the Act are 63A: supplementary, 63A and 67A.

A step-by-step summary

Read the guidance above to help you understand the detail behind these steps.

Step 1: Does your appeal have a secondary purpose?

Yes: Use the donations for your secondary purpose.

No: Continue with these steps.

Step 2: Return donations to donors who said they wanted their donation back if you could not achieve your appeal purpose or purposes.

Step 3: Identify donations which are small value, or from cash collections or competitions. You can use these for new purposes.

Step 4: Set out how you plan to return the remaining donations. Send your plan to the Charity Commission to authorise. Act on your plan. Where there are donors you still cannot contact or identify after you have acted on your plan, you can use their donations for new purposes.

and/or

You may believe it is unreasonable to try to return some donations. You must ask the Commission to authorise the use of these donations for new purposes.

Next steps:

• Decide what the new purposes should be for the donations you want to use for new purposes.

Read the guidance to understand how you must approach this.

• Is the total value of donations you want to use for new purposes £1,000 or less?

Yes: You can pass a resolution (a formal decision) to use the donations for the new purposes you have decided. Keep a record of your decision.

No: You can pass a resolution (a formal decision) to use the donations for the new purposes you have decided, but you must first ask the Commission to authorise your resolution. Keep a record of your decision.