Keep it legal: Disaster appeals

Disaster appeals to offer aid to victims are an increasingly common response to tragic national and international events.

In the urgent desire to help, there is often little time to prepare a definite structure for the public fundraising that takes place. 

Disaster appeals can fail to achieve charitable status because of the lack of certainty of their charitable objective or because insufficient funds are collected to achieve the declared purpose for which the appeal was established.

It is essential, therefore, that the trust deed clearly sets out the objectives of the trustees. In drafting the trust, thought must be given to what will happen to surplus funds if the objective of the trust is achieved with cash to spare, so that potential donors can be appraised fully on how their donations may be applied.

To assist organisations that want to launch disaster appeals, Baroness Scotland, the Attorney General, has set out some general guidelines.

They state that from the outset, a vital issue to consider is whether a charitable or non-charitable appeal should be launched. A charitable appeal will benefit from generous tax relief, but must be exclusively charitable, which can restrict the flexibility of the trustees.

A non-charitable appeal, on the other hand, can be used to benefit specific people, regardless of demonstrable charitable need.

The guidelines also suggest a form of appeal that can be used for a charitable fund. The suggested form includes reference to the specific disaster or event that the appeal is designed to apply to, the purpose of the fund, including a declaration that the purpose will be satisfied in accordance with charity law, and finally a statement that explains how any surplus funds will be used once the original purpose has been met.

The Attorney General emphasises that, although the suggested form of appeal in the guidelines is useful, those wishing to set up appeals should still seek advice on what should be included in the trust deeds.

The Charity Commission can advise on these issues and will be able to provide an opinion on whether a proposed appeal will actually be charitable.

David Rhodes is an associate with Yorkshire law firm Andrew Jackson.

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