Rights, Obligations and Risks Associated with Fundraising and DonationsNovember 30, 2016 - 4 minutes read
When a non-profit or faith organisation runs a fundraiser or receives donations, it comes with a lot of responsibility. It also comes with plenty of risks. Donors who give in good faith want to be assured that their funds are being directed where they intended them to go and are being used safely, wisely and responsibly.
Below we have outlined some of the rights held by donors and the responsibilities and risks that go with fundraising.
While donors often give in good faith they have the right to be informed of the intended use of their donations. They should also be informed of the fundraising organisation’s objectives, and given access to its most recent annual report. In addition, fundraisers should always respect their donors’ privacy.
With regard to the above section on donor rights, fundraisers holds the responsibility to answer the donor’s questions promptly and to provide written or printed receipts. They should also respect donors’ privacy by getting their approval before making any donations public.
Other responsibilities include refraining from harassing or pressuring existing or potential donors to give, respecting donors’ right not to donate or to receive phone calls or materials, and complying with regulations regarding privacy, spamming, the Competition and Consumer Act, and state, territory and local government requirements.
Fundraising risk management for churches and non-profits
Fundraising does come with a number of risks. After all, in some cases you might be handling substantial amounts of money! Some of these are:
- Poor security. For cash donations, it’s vital to have good risk management and security. Examples include dual counters and a fireproof safe if the funds cannot be banked immediately.
- Inadequate online instructions. For online donations one of the risks is that donors omit to include a reference that explains where the funds have come from and what they are for. This makes it important to instruct donors on the reference to key in when donating online – such as their last name and an abbreviation that explains the purpose of the donation. Omitting this may mean that you receive funds into your bank account but have no clue where they have come from or what they are for.
- Failing to meet targets and goals. This could occur due to unrealistic expectations, failing to put your case adequately or clearly, or presuming that donors who have given every year will do so on this occasion. To mitigate this, you should contact donors early on. This will give you plenty of time to provide a compelling case for your fundraiser.
- Directing funds incorrectly. It could be easy during a busy fundraising event to accidentally overlook a donor’s wishes and requests. Make sure to respect your donors by implementing robust procedures for fundraising. This applies especially in regards to how funds are received, directed and used.
Need more information?
Fundraising Institute of Australia – Principles and Standards of Fundraising Practice
ATO: Gifts and Fundraising for Not-for-Profits
Faith Insurance articles:
Financial risk management for churches and faith organisations.
Written by Tess OliverTags: finances, legal, risk management