Online donations financial best practice - resources and recording

Current environment

• Latest figures from Goodbox, which supplies contactless technology to the non-profit sector UK, found that the number of individual contactless donations increased from 32,000 in May 2019 to 78,000 in May 2021.
• Barclaycard research demonstrated that charities in the UK may be missing out on more than £80m in donations each year by only accepting cash donations
• 22 of the biggest UK charities also partnered with Apple to allow iOS users to pledge donations through Apple Pay. The feature allowed anyone with a supported iPhone, iPad or Apple Watch to send money securely, using only their fingerprint

Fundraising Regulation

The Fundraising Regulator sets the standards for the responsible collection and utilisation of donations. These standards are outlined and explained in the Code of Fundraising Practice, and can be roughly grouped into the following categories: Responsibilities, Behaviour and Processing donations

Some examples of cashless payments

Just Giving

• Free membership plan for charities
• No monthly fee: You just pay the standard 1.9% +20p payment processing fees and 5% on Gift Aid.
• Online campaigns: Launch an always-on campaign or appeal that your supporters can donate to or create their own fundraising pages to support.
• Individual giving made easy: Put a donate button on your site to receive donations, provided the links and code.
• Gift Aid reclaim: Boost your donations by 25% with our automated Gift Aid reclaim on eligible donations.

PayPal

• Simple setup: Easily create a Donate button for your website, no programming skills required.
• Fast processing: Donations go straight in to your organisation's bank account usually within minutes.
• Easy Payment: Donors can use credit or debit cards to make a donation, an account with PayPal is not required.
• Option to set up monthly recurring donations

Sumup

• Fully integrated with Give A Little app:
• No contract: Pay-as-you-go with no fixed or hidden costs.
• No Errors: Checkout totals automatically sync to SumUp
• No Cables: Fast mobile payment acceptance
• Secure: Highest security and PCI compliance standards

Goodbox

• Tap to Donate Device
• FCA regulated, PCI & GDPR compliant
• All funds raised are settled weekly
• Eliminates unnecessary admin

Safer Giving Campaign

The Fundraising Regulator has joined with the Charity Commission, National Trading Standards and Action Fraud to emphasise the importance of donating safely this festive season. The regulator advised the public to be mindful when donating to charity, by checking the legitimacy of the charity by ensuring it is registered with the Charity Commission, using the Fundraising Regulator’s directory to check whether it is registered, if it has a fundraising badge or asking for more information before donating.

Gift Aid

You can claim back 25p every time an individual donates £1 to your charity or community amateur sports club (CASC). This is called Gift Aid. You must be recognised as a charity or CASC for tax purposes with HMR. There are rules on which donations you can claim Gift Aid on. You can claim Gift Aid online - you should get your payment within 5 weeks. For more information on gift aid click here.

Managing Risks

Fraud - Charities lost £1.6m of public donations to online fraud over the last year, according to data from Action Fraud. Between October 2020 to October 2021, Action Fraud received 702 reports of online charity fraud from the general public. Some online fundraising risks include - impersonation of your charity, fake websites, scam donation

Reducing potential risks

1. Implement a Policy - A fraud policy should clearly show what risks your charity faces, how you will mitigate those risks, what you will do when fraud has occurred and how someone can report suspected fraud

2. Fraud Reporting systems  - Create a staff/volunteer guide to reporting concerns that explains the what, why, where, how and to whom.

3. Have counter-fraud measures in place. i.e Fraud response plan. Report all actual or attempted fraud/cyber-crime to Action Fraud.

4. Charity Commission Involvement  - Review your internal financial controls and complete the self-assessment checklist to evaluate your charity’s performance against legal requirements and good practice recommendations.

5. Register with the Fundraising Regulator - this gives confidence to donors that the charity is committed to responsible fundraising, and to adhere to the best practice and legal standards outlined in the Code of Fundraising Practice.

6. Due Diligence on Potential Donors (for larger donations)  - include identification or registration, politically exposed person/state-owned enterprise status or affiliation, geopolitical risks associated with the donor’s location and reputational concerns

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