A presentation on charity fundraising through lotteries, public collections, fundraising events and trading. Presentation given at NICVA's Charity Finance Conference on 8 November 2016.

1. Denise Copeland, Governance &
Charity Advice Manager
8 November 2016
raising money, the rules explained

2. Fundraising
• Lotteries
• Public collections
• Fundraising events
• Trading

3. Key legislation for NI
• Betting, Gaming, Lotteries and Amusements (NI) Order
1985 (amended by Betting and Lotteries (NI) Order 1994
• House to House Charitable Collections Act (NI) 1952
• House to House Charitable Collections Regulations (NI)
1952 & 1953
• Police, Factories, etc (Miscellaneous Provisions) Act
1916’
NB The Gambling Act 2005 does not extend to NI

4. Code of Fundraising Practice - a detailed
guide on both legislation and best practice

6. Lotteries

7. Lotteries
• Small lotteries at exempt entertainments
• Private lotteries
• Societies’ lotteries

8. Small Lotteries at exempt entertainments
May be held as part of the following:
• a bazaar
• sale of work or jumble sale
• fete
• dinner
• dance
• sporting or athletic event
• other entertainment of similar character

9. The conditions are:
• The whole proceeds of the event and lottery shall
be devoted to purposes other than private gain
• Tickets only sold during the event
• Winners announced on the premises
• Lottery not the only inducement to public to attend
• No fixed maximum ticket price
• Police to be notified 7 days prior to the event

10. Private Lotteries
Must be promoted in NI by and for the following:
• members of one society (not gaming) or
• people who work together or
• people who live together and
• confine the sale of tickets to such people
(may sell tickets to non-members on own
premises)

11. • Realise no more than £1,000 on the sale of tickets
• The whole of the proceeds (after proper deductions)
must be devoted to the provision of prizes or applied to
the purposes of the society
• Useful source of fundraising at an AGM
• No fixed maximum ticket price

12. Societies’ Lotteries
One promoted by a society established and
conducted wholly or mainly for:
• Charitable purposes or
• Participation in or support of athletic sports or
games or cultural activities or
• Not 1 or 2 but neither for commercial or
private gain

13. The society’s lottery must:
Be promoted in Northern Ireland by:
• a society registered with the approved district council
• be promoted in accordance with an approved lottery
scheme
• all proceeds after lawful deductions, must be applied
to the purposes of the registered society

14. Can a GB or a ROI charity sell its raffle
tickets in NI?
•English or ROI charity with NI branch - cannot offer
same prize throughout the UK or the island of Ireland
•NI branch must register lottery with district council as
with any group here
•Sell tickets by mail/phone to an individual but they
then are not permitted to sell the tickets to others in NI

15. Is a competition a lottery?
A competition involves an element of skill and is
not a game of chance so is not covered by the
rules of lottery legislation.
Good practice - look at the gambling commission’s
guidance

16. Street collections

17. Street Collections
A permit must be obtained from PSNI
to collect money through street
collections or public places

18. A street is defined to include
‘any highway and any public bridge, road, lane, footway,
square, court, alley, or passage, whether a thoroughfare or
not.’
Other public areas such as bus and rail stations, churches,
supermarkets or shopping precincts do not fall under the
current definition of ‘public place’ and therefore permission
to collect should be sought from the relevant land owner.

19. House to House
collections

20. House to house collections
• Must obtain licence from PSNI for a collection in
a limited area
• Exemption order may be obtained from Charities
Branch (DfC) for NI wide House-to-House
collections only

21. • Charities to have written contracts with professional
fundraisers and commercial participators
• Professional fundraisers will have to indicate which
organisations will benefit and the amount of their
remuneration
• Commercial participators will have to indicate
organisation that will benefit, and the amount that will
be given to the institution.
Charities Act new requirements have not
been introduced yet

22. Trading considerations - Need to consider
which classification your income generation
falls under

23. Trading by charities
Charities can benefit from tax exemptions on
profits from:
• Primary purpose trading
• Ancillary trading
• Some non primary purpose trading (small scale
exemptions)
• Certain charity fundraising events and lotteries
Sales of donated goods are not considered as trading

24. Primary purpose trading
Trading contributing directly to one or more of a charity’s
purposes:
• provision of educational services by a charitable school
in return for fees
• sale of goods manufactured by disabled people who are
also the beneficiaries
• provisional of residential accommodation by a residential
care charity in return for payment

25. Ancillary trading
Trading which contributes indirectly to the furtherance of
the purposes of a charity
• Will be treated as part of primary purpose trading
• Trading is not regarded as ancillary to the carrying out of
a primary purpose simply because its purpose is to raise
funds for the charity

26. Examples of ancillary trading
• The sale of food and drink in a restaurant by a theatre
charity to members of the audience
• The sale in a charity shop of bought-in goods that are
related to the primary purposes of the charity eg
literature providing advice and support for people with
cancer
• The sale of confectionery, toiletries and flowers to
patients and their visitors in a hospice
• The sale from a hospice café to patients and their
visitors

27. What ancillary trading does not extend to:
• sales from a charity shop of bought-in goods that are
unrelated to the charity’s objects eg sales of greeting
cards and jewellery
• the sale of confectionery, toiletries and flowers to the
general public
• sales from a hospice café to members of the general
public
• The level of annual turnover which is said to be ancillary
may have a bearing on whether or not the trade is really
ancillary

28. Non-Primary Purpose Trading
• Trading carried on with the sole aim of raising funds for a
charity
• Charities may engage in limited non-primary purpose
trading ONLY if there is no significant risk involved to the
charity’s assets
• No general exemption from corporation tax on the profits
of non-primary purpose trading however may fall under
the small scale exemption

29. The Small Scale Exemption
• Exemption from corporation/income tax primarily on the
profits from small-scale non-primary purpose trading eg
small scale selling of christmas cards or similar activities
• Applies only where all the relevant profits or income are
applied for the charity’s purposes

30. The small-exemption – depends on the size of
your total gross annual income
Total of all incoming resources in a
particular chargeable period of the
charity
Max permitted annual turnover of
the relevant trading in that
chargeable period
Under £20,000 £5,000
£20,000 to £200,000 25% of charity's total incoming
resources
Over £200,000 £50,000

31. Fundraising events – non taxable income
• ball, dinner dance, disco, barn dance, dinner, lunch or barbecue
• performance - concert, stage production and any other event which
has a paying audience
• showing of a film; game of skill, contest or a quiz
• fete, fair or festival, fireworks display; horticultural show
• exhibition: art, history or science
• bazaar, jumble sale, car boot sale, or good-as-new sale
• sporting participation (including spectators): sponsored walk or swim
• sporting performance
• participation in an endurance event
• an auction of bought in goods - an auction of donated goods is zero
rated

32. Exercise
• What are your current and/or proposed income
generating activities?
• Do they fit within your Objects?
• Will the activities push you over the permitted
HMRC threshold?

33. When to use a trading subsidiary
• To carry out activities outside objects and
powers
• Must be used for non-primary purpose trades
involving significant risk
• Want to make it a viable business without
restrictions placed on it by rules for charities?
• If the charity does not want to register for VAT
• To keep liability separate from main organisation

34. Trading subsidiaries
• Should have a business plan
• Profits do not qualify for charity tax exemption
• Transfer profits to the charity as a gift aid donation
• Same restrictions on paying charity trustees apply to
those charity trustees who are directors of its trading
subsidiary
• Trading subsidiary must pay a rent or fee for use of
charity’s resources
• Charity may give a loan on proper commercial terms

35. Check your governing document
• Do you have the power to raise funds
• Do you have the power to trade?
• Do you have the power to establish a trading
subsidiary?
• Do you have the power to enter into contracts?

36. Can a charity donate to another charity?
The fundraising activity should still have a link to
advancing its charitable purposes, for example:
• a community group that gets people together for
a coffee morning could give the proceeds to a
cancer charity
• A sports club holding a tournament could also
give the proceeds to another charity as it would
be advancing amateur sport.

37. Useful online resources
www.nicva.org NICVA guidance on collections,lotteries
www.charitycommission.gov.uk CC35 Trustees, trading and tax
www.gov.uk HMRC exemptions guidance for
charities/not-for-profits
www.diycommitteeguide.org governance online resources mapped
to Good Governance Code
www.institute-of-fundraising.org.uk Code of Fundraising Practice
www.charitycommissionni.org.uk Charity Commission for N. Ireland