Public Benevolent Collections
Posted: Wednesday 12 October 2011
Of all the various ways in which charities go about fundraising perhaps the oldest and most recognisable of them is the public collection. Most of us are familiar with the sight of fundraisers waving collection tins in the street, but such collections have often received bad press due to scams masquerading as genuine charity collections. Nevertheless, public collections remain an important and effective way of fundraising for Scottish charities, even if the fundraisers are now as likely to be collecting direct debit details as coins.
Public collections are often the main contact between charitable organisations and the public and to maintain public confidence in such collections both OSCR and the Scottish Government believe that the current law needs to be reformed. There have also been advances in fundraising methods since the time the current legislation was drawn up, making it important for reform to take place. They hope that these changes, including a new name and wider definition, will help restore public confidence in public collections.
Current law
At the moment in Scotland, public charitable collections (“PCCs”) are regulated primarily by the Civic Government (Scotland) Act 1982.
The main rules as it currently stands are:-
- the PCC must only raise funds for charitable purposes;
- it is an offence to hold a PCC without the permission of the relevant local authority;
- permission must be applied for in writing at least one month before the collection is going to take place unless the local authority has specified a different time limit;
- if granting permission, the local authority can place conditions on the PCC such as the date or time when it should be carried out;
- permission can be refused on specific grounds such as inconvenience to the public or that the local authority believes that the amount likely to be used for charitable purposes is inadequate having regard to the likely proceeds of the collection;
- if the local authority refuses permission then the organiser of the PCC must be given written notice of the refusal including the reasons for it;
- certain organisers (not organisations themselves) can be designated as Exempt Promoters. Exempt Promoters do not have to obtain permission to hold PCCs but must nevertheless give the local authority three months’ notice of the collection; and
- one month after the end date of the PCC, accounts showing the proceeds raised by the collection must be submitted to the local authority.
Proposed reforms
Certain sections of the Charities and Trustee Investment (Scotland) Act 2005 contemplated changes to be made to the PCC regime to bring it more up to date, and to introduce some uniformity. Those sections are not yet in force and will need to be “fleshed out” by secondary legislation which the Scottish Government is consulting on now. Broadly, the proposed new regime will provide that:-
- a collection previously known as a PCC will be known as a public benevolent collection (“PBC”);
- the existing rules will be replaced and the Scottish Government will have the power to issue new regulations in the future;
- PBCs will include collections not only for charitable purposes but also those with “benevolent” or “philanthropic” purposes;
- organisers will need to apply for a licence from the local authority further in advance – two months prior to the collection;
- the Exempt Promoter Scheme will be renamed the Designated National Collector Scheme and may operate differently;
- the time at which accounts will be due after a collection and whether they will be required at all will be decided in subsequent regulations;
- the definition of a public place will become wider, so that collections taking place anywhere to which the public has “unrestricted access” will be included – this means collections in car parks or shopping centres may also fall under the new rules;
- as well as asking local authorities for permission, organisers will also have to seek the consent of the owner of the premises where the collection is taking place; and
- collections where members of the public sign up to direct debits rather than giving over cash will also require a licence from the local authority because the rules will be extended to cover collections where the donation made takes the form of a “promise of money”.
OSCR’s role regarding the new PBCs is not yet clear but is likely to involve monitoring and advising charities, local authorities and fundraisers as well as promoting good practice in collections.
What does my charity need to do?
The next stage of the consultation will be the Government's publication (in collaboration with OSCR) of a Consultation Report, which is expected by early 2012. Thereafter a further consultation on the draft regulations will take place before publication of a further Consultation Report. As such, it is unlikely that the changes will be in place before the second half of 2012.
These changes may have a significant impact on the way Scottish charities raise funds. As public collections are an important interface between the public and charities, the Scottish Government believe the changes will help improve public confidence in charities by tightening up the way they are regulated, but only time will tell whether this proves to be the case. It will be interesting to see, for instance, what approach the Government takes to questions such as what a promise of money really means and what the new “public place” definition will be. For instance, would a collecting box located in a building owned by a charity and accessible to the public at certain times fall within the new rules? Probably not, but we will need to see the final regulations for a definitive answer. We will report back on the progress of the reforms as they proceed and more details come to light.
At this stage you should be aware that changes are likely to be made and you may wish to consider what the impact may be for your charity and whether you may need to change the way you organise public collections. If you would like to share your views on the proposals with the Scottish Government then you can email charityact@scotland.gsi.gov.uk.
Morton Fraser’s Charities Team has considerable experience in the formation of, and provision of ongoing advice to charities in Scotland including advising on incorporation, mergers and regulatory matters. The team adopts a cross-departmental approach drawing on both corporate/commercial experience and private client trust experience. If you would like any further information on the consultation, or on any other aspect of charity law, please contact Lauren Scott.
