How Can Charities Fundraise?

The sources of a charity’s income will differ according to the nature of the charity, the types of activities in which it engages, the services (if any) it provides to beneficiaries, and whether and how it carries out fundraising. 

If a charity provides any services to any of its beneficiaries, it may or may not charge fees for those services. If it does charge fees, they may be paid by the beneficiaries receiving the services, or their local authority or the NHS may agree to pay some or all of the fees. Where the fees received by the charity only partially cover its total costs of providing the services concerned, or it does not receive any fees, it will need to subsidise those costs out of non-fee income of the charity.

Where a charity provides services or undertakes one or more types of activity to further its charitable purposes but it does not charge fees for doing so or it only receives part payment of fees for doing so from the relevant beneficiaries or third parties, some or all of the expenses of its charitable activities will have to be met out of its own resources. Apart from any other funds that it can make available (e.g. income from investments), it  will need to rely on funds raised from its fundraising activities. For present purposes, the terms "fundraising"  means a wide variety of methods that a charity can use to fundraise, as follows. Charities might: 

• receive one-off, or periodic, donations of cash or goods from supporters
• receive donations from individuals who have raised “sponsorship” donations from third parties who sponsor those individuals to carry out a “challenge”, e.g. a sponsored walk in aid of the charity 
• receive income in the form of a cash or non-cash legacy left by a supporter in their will
• receive grant income from various sources
• hold investments and receive income from them - charity law permits charities to hold various types of investments, e.g.  property, shares, cash on deposit, interest bearing loans. See the Charity Commission's Investing charity money: a guide for trustees 
• engage third parties to raise funds for them, either volunteer support groups or commercial entities
• raise funds by means of lotteries, e.g. ticket income from raffle tickets.

Further details of each of these ways of raising funds are outlined in the following pages.