Fundraising should be a positive force, enabling charities to fulfil their missions and support their beneficiaries. For most organisations, this remains true. However, increasing economic pressures can lead to declining standards and threaten public trust in the sector. Indeed, a brief glance at the industry media quickly demonstrates the frequency with which The Fundraising Regulator reports on these declining standards.
Unethical fundraising, such as aggressive solicitation, lack of transparency, or dishonest financial practices, harms both individual organisations and the sector as a whole. Public scepticism grows when charities fail to uphold ethical standards, making it harder for all to secure donations. Fundraising is often a charity’s most visible activity, shaping how the public perceives its values and integrity.
To support ethical practices, the Fundraising Regulator provides guidance through its Code of Fundraising Practice. This document sets essential standards for organisations and their governing bodies, covering:
- Upholding high ethical standards
- Ensuring transparency and accountability
- Providing clear complaint-handling procedures
- Establishing ethical benchmarks for fundraising practices
- Fostering honesty, openness, and respect between fundraisers and the public
Adhering to these guidelines ensures organisations operate responsibly while maintaining donor confidence.
Beyond fundraising methods, charities must also consider the ethics of accepting donations. The Charity Commission provides guidance on when to accept or decline donations, generally presuming that funds should be accepted unless ethical concerns arise.
Circumstances in which donations should be refused might include:
- When the funds are obtained illegally
- When the donor lacks the mental capacity to give
- Where legal restrictions exist preventing the donation
- Or when the donor imposes unreasonable conditions on fund usage
Other situations may require further evaluation. For instance, a donation may present conflicts of interest, compromise a charity’s independence, or impose costs that outweigh its benefits. If accepting a donation could harm the charity’s reputation or contradict its values, refusal may be necessary. In such cases, careful negotiation is advised before outright rejection.
Organisations should also monitor who fundraises in their name. The Code of Fundraising Practice distinguishes between fundraising on behalf of a charity (e.g., professional street fundraisers) and fundraising in aid of a charity (e.g., bake sales, community events). While charities directly oversee on behalf of fundraisers, they have less control over in aid of efforts, although a level of awareness of these external fundraising activities is crucial – so far as is possible – to mitigate reputational risks.
A final – and vital – area to consider is how to maximise the huge potential of unrestricted funds, whilst remaining ethical and transparent. Four areas to consider include:
1. Accurate attribution of appeal costs – when running a restricted appeal, make sure that the fundraising costs associated with it are allocated to that appeal. Too often, these costs are off set against unrestricted funds, thereby limiting their potential
2. Gift Aid flexibility – thoughtful wording on Gift Aid declarations can allow a portion of donations to be used across broader activities rather than being restricted to a specific appeal
3. Clarifying core costs – administrative or operational expenses should be communicated openly, ensuring donors understand their necessity in supporting the charity’s mission
4. Repurposing appeal funds ethically – transparent terms and conditions can outline scenarios where restricted funds may be reallocated. For example, if a project is completed under budget, external factors prevent its continuation, or surplus funds remain, a charity can give itself flexibility to use those resources effectively elsewhere.
By following these principles, charities can ensure their fundraising activities remain ethical, responsible, and sustainable, reinforcing public confidence and long-term support.