This page provides guidance of the payment of fundraisers.
Costs are inevitably involved in fundraising, and this includes paying fundraisers. There are a variety of different payment mechanisms which may be applicable to employing different types of fundraisers in different situations. It’s important to establish a payment structure that strikes a balance between sufficiently rewarding the work of a fundraiser, and enabling the fundraising organisation to raise as much money as possible for its cause based on that investment
All funds must be used reasonably and prudently in the best interests of the organisation. That involves ensuring that the remuneration of fundraisers is proportionate to the benefit that is reasonably expected
Fundraisers might be employees of the fundraising organisation, volunteers, consultants or employees of an agency. It is advisable for fundraising organisations to ensure that they are clear about the status of their fundraisers and take advice as appropriate.
A variety of mechanisms can be used when paying fundraisers. The most commonly used ones and some of their characteristics are listed below:
An excessive payment is one that is considerably more than an ordinary, well informed person would consider reasonable. It is essential that fundraising costs are not excessive. Fundraising organisations should be aware that excessive remuneration and high pressure techniques will lead to a breakdown in trust and confidence in both the organisation and sector more widely, and ought to take steps to minimise this risk.
To establish a reasonable payment structure, it is advisable for fundraising organisations to consider:
Where appropriate, it is a good idea for maximum caps or reducing sliding scales to be used to avoid excessive remuneration. Maximum caps and reducing sliding scales will be influenced by a variety of individual factors including the size of the organisation and the time span involved.
Public trust and confidence are essential in ensuring successful and sustainable fundraising. Members of the public may hold strong views about how, and indeed whether, fundraisers are remunerated which may in turn influence their decision to donate.
It is important for fundraising organisations to consider public trust and confidence, balancing public perceptions with a good business plan
Organisations ought not to use commission payments, particularly commission-only payments, unless the following conditions are met:
It is advisable for volunteers to have their expenses reimbursed and it is good practice that this happens regularly to ensure volunteers are not left out of pocket. Volunteers should only have their out-of-pocket expenses reimbursed and, and not be paid a flat rate amount as this may trigger minimum wage legislation.
Where possible, it is a good idea for receipts to be received before expenses are paid. In some cases, it may be appropriate to reimburse expenses in advance, with the subsequent provision of receipts where possible. This may be appropriate for example where larger sums are to be paid and it is unreasonable to expect the volunteer to pay them, or the volunteer’s financial circumstances make it difficult for them to incur expenses in advance.
Training that is not related to the activity, use of the fundraising organisation’s other facilities, or payment in excess of out of pocket expenses may lead to a contract of employment being entered into inadvertently.
In England and Wales
Trustees must not be paid for fundraising on behalf of the charity unless the following criteria are met:
In Scotland, the remuneration of charity trustees is strictly prohibited unless strict conditions are met. These are:
These provisions also apply to payments to those persons considered by the 2005 Act to be connected to trustees, including business associates and family.
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