Restricted and unrestricted funding

Sometimes, charities will choose to link the ‘ask’ directly to the outcome – and this can be really effective. However, these claims – for example, "£2 could buy a watering can" - need to be explained. How costs are arrived at and what these costs include must be communicated to donors. Claims that cannot be substantiated should not be made, and the language used in marketing materials should be consistent.

Charities should bear in mind the impression given to donors by marketing materials and when seeking donations. For example, "£2 buys a watering can" is a much stronger statement than "£2 could buy a watering can" and charities should consider whether such statements can be delivered upon. The former statement states that a donation of £2 will buy a watering can whereas the latter suggests a watering can as an example of what £2 could buy.

Remember, you can’t fundraise for something in particular and then say that you decided to spend it on something else after all. This risks undoing all of the good work that you do in building the donor relationship.

You can read more about how to make the purpose and need for a donation are clear in our guidance Clarity and Accuracy in Fundraising.   

A legal principle underpinning fundraising is that all funds raised for a particular cause must be used for that particular cause.

Examples of restricted funding include beneficiary gifts, emergency appeals where money will be raised for a specific purpose, legacies donated for a specific purpose, or a grant given for a particular project. It is important that charities are transparent about how donations will be used. They should not imply in their fundraising and marketing communications that a donation will be used for a specified purpose if it will be used for general funds. 

Fundraisers should not imply in their fundraising and marketing communications that a donation will be used for a specified purpose if it will be used for general funds.  

Fundraising appeals for restricted purposes

It is common for charities to run an appeal to raise money for a specific purpose or project.  

Sometimes, appeals do not raise the amount needed, raise too much meaning there are funds leftover, or the circumstance change and the you cannot use the donation as planned.  

In these situations, it might be possible to use the money raised for a similar purpose, depending on how the appeal was worded.  For example, you could consider:  

• Including a secondary purpose in the appeal 
• Broadening what the appeal is asking for 

You can read more about this in the Charity Commission’s guidance Charity fundraising appeals: appeal wording and record keeping.  

When an appeal raises surplus income 

If your appeal raises too much money, then you must follow a process set out by the Charity Commission to identify a new purpose for the donation. This process differs depending on if the surplus funds exceeds £1000.  

You can read about the process you must follow in the Charity Commissions’ guidance Charity fundraising appeals: using donations when you’ve raised more than you need. 

When an appeal does not raise enough or the need for the money changes 

If your appeal does not raise the necessary amount, or circumstances change which means you cannot spend the money raised on its initial purpose, then you can either: 

• Offer to return the donations 
• Follow a process set out by the Charity Commission to identify a new purpose for the donations 

You can read about the process you must follow in the Charity Commissions’ guidance Charity fundraising appeals: using donations when you have not raised enough money or you cannot achieve your appeal purpose 

The Fundraising Regulator has also written a blog What to do if you raise more donations than you need, don’t raise enough, or cannot achieve your purpose.