Everything you need to know to make sure your charity cash is protected, and above board.

Handling Donations – the Basic Steps

Publish accounting rules and guidelines. Most of what you do as a charity fundraiser is fun and feel-good. But every so often a story pops into the news about the mishandling of charity cash, and it can be soul-destroying if it affects your cause. Some basic housekeeping can keep this from happening to you. Follow our checklist to make sure you’re ticking all the boxes to keep your donations safe.

Know the law. If someone donates, and also specifies what the donation is to be used for – eg £10 for the new playground, £5 for sports kit, etc. – it must be used for that specific purpose. In addition, if you’ve held a fundraising event for a particular project, you must use the money raised for that.

Keep records. As a volunteer fundraiser be careful about deducting money from the cash you receive, and make sure you have a prior agreement with your charity. For example, if you’re paying for the ingredients for your cake sale, keep receipts - expenses must be met by the charity after the donations have been receipted.

Checklist for Handling Donations

Receipts:

• You should be giving a receipt for each donation.
• However, if you use a sealed collection box, you don’t need to give receipts.

Banking:

• Cash must be banked as quickly as practically possible.
• Every charity should have a standardised procedure stating who does the banking, and when, so make sure monies are handed to that person as soon as the event or collection has ended.
• Get an independent person to verify that the amount banked tallies with what was recorded on the income summary.
• Different rules apply in Scotland. 

Cash:

• Two unrelated individuals should collect and count your cash donations.
• Sealed collection boxes should be left for the charity you’ve raised the money for, or a bank official to check and count.
• Count cash in a secure environment.
• Never leave cash unattended.

Cheques:

• Send or take cheques to a bank as soon as possible.
• Larger amounts should be sent via recorded delivery.

Charity vouchers/cheques:

• Some people use a charity account – if you’re given one of these, don’t panic! Treat them much the same as you would a regular cheque - the charity should deal with them as quickly as possible.
• If you have any involvement with Gift Aid, remember that these charity vouchers have already had Gift Aid collected on them, so don’t collect it again.

Working Example – School Cake Sale

• Create a float, and make a record of exactly what’s in it. Put it in with the cash, in case someone else does the counting at the end.
• Keep all donations in a safe place, and get an adult to receive the money, even if it’s children who are making the sales.
• At the end of the sale, get two unrelated people to count up the cash.
• Bank the cash as quickly as possible, or get it to the charity’s nominated treasurer.
• If you needed to pay for anything as part of putting the sale on – eg. cake ingredients – give a receipt to the school and arrange to be paid back your expenses. This should have been agreed with the treasurer beforehand.

Handling Donations Checklist

1. Do you have a procedure for giving receipts
2. Who will count cash?
3. Where will cash be counted?
4. Who should monies be given to?
5. Procedure for claiming expenses.
6. Create and count float.
7. Cash banked/held in safe place.
8. Bank cheques (recorded delivery if large amounts)
9. Charity vouchers dealt with
10. Gift Aid checked

What next?

Use the checklist for your next fundraising initiative. Share this article with the rest of your team, and anyone you know who is involved in creating your fundraising ideas.

A complete list of legal requirements for charity accounting can be found here.

Any material published on this website does not give a full statement of the law, nor does it reflect changes after the date stated on each document. It is intended for guidance only and is not a substitute for professional advice. No responsibility for loss occasioned as a result of any person acting or refraining from acting on the basis of this material can be accepted by the author or by Fundraising Expert.