19.0 Payment of Fundraisers
KEY: * denotes legal requirement
19.1 Legal References for this Section
- General principles of charity law
- Employment Rights Act 1996
- Data Protection Act 1998
- Charities Act 1992
- Charities Act 2006
- HMRC Gift Aid Rules
- House to House Collections Act 1939
- House to House Collections Regulations 1947
- Charitable Collections (Transitional Provisions) Order 1974 (contain model local regulations)
- National Minimum Wage Act 1998
- House to House Charitable Collections Act (NI) 1952 and 1953
- Police, Factories, etc. (Miscellaneous Provisions) Act 1916
This section applies to all organisations engaged in paying fundraisers, no matter what the specific fundraising technique involves or who they are employed by, for example, be it the fundraising organisation themselves or another professional organisation.
19.3 Overarching Principle
a) All funds MUST* be used reasonably and prudently in the interest of the fundraising organisation. This involves ensuring that remuneration of fundraisers is proportionate to the benefit reasonably expected to be obtained.
19.4 Choosing the Appropriate Payment Mechanism
19.5 Excessive Remuneration
a) Payments to fundraisers MUST NOT* be excessive. For the purposes of this code, an excessive payment should be regarded as one which is considerably more than an ordinary, well-informed person would consider reasonable.
a) The Institute of Fundraising opposes commission payments in principle, particularly those payments made on a commission-only basis. Organisations MUST NOT use commission payments unless the following conditions are met:
- other sources of fundraising investment have been explored and exhausted;
- payments are subject to approval by the fundraising organisation’s trustees, or senior executives when power has been delegated; and
- safeguards are in place to ensure excessive remuneration is not permitted.
19.7 Performance Management Systems
19.8 Individuals’ Requirements
a) Where an employment relationship exists, the employer MUST* ensure that their chosen method of remuneration meets the Employment Rights Act 1996 (in Northern Ireland The Employment Rights (Northern Ireland) Order 1996), and MUST* comply with the minimum wage rules in the National Minimum Wage Act 1998.
Further information is available from the Department for Business Innovation and Skills.
19.8.2 Professional Fundraisers
a) Those freelance fundraisers and consultants who fall within the legal definition of a professional fundraiser MUST* comply with the applicable legal requirements.
a) Trustees MUST NOT* be paid for fundraising on behalf of the organisation unless specific criteria are met (which differ according to jurisdiction).