How does Gift Aid apply to the different methods of fund-raising and how should I deal with them?

Not surprisingly, Gift Aid  applies only to gifts.  Money which is paid for something, a meal, a social function, or as a chance to acquire something as in a lottery or raffle is not a gift and Gift Aid is not relevant.

However, there are some surprising situations in which Gift Aid can be used.  The following notes examine the procedures to be used in each of the following situations:

·        Regular payment plans (“RPP’s”)

·        One-off donations

·        Lodge collections (inc alms collections)

·        Social events

·        Sponsored activities

·        Raffles, Lotteries, “100 Club” and similar arrangements

·        Jumble sales, Bring & buy stalls etc

·        Auctions

If advice is needed on any other fund-raising activity not included in these notes, please contact W. Bro Tony Prevett via the helpline.

There is one recurring theme in these notes and this applies to all forms of fund-raising.  If the activity is undertaken in the name of Essex 2011, the proceeds should be remitted directly to the Essex 2011 Relief Chest, following the instructions set out in the sections below. If the activity is undertaken to benefit the general charitable work of the Lodge, it can be paid into the Lodge’s own Relief Chest

How do I deal with Regular Payment Plans (“RPP’s”)?

There can be little doubt that the success of Essex 2011 will largely depend on the number and level of RPP’s taken out by the member of its lodges.  The other self-evident statement is that the earlier these start, the more they will yield.

Take the case of a brother who agrees to pay the modest sum of £10 per month for what might be 66 months before the Festival ends.  Elementary mathematics gives a total contribution of £660.  If this is paid under a Gift Aid declaration, tax rebates will be reclaimed totalling £186.  This means that the brother (and his lodge) will be credited with a total of £846.  If 20 brethren in a Lodge all do the same, this amounts to no less than £16,920.  If this is repeated over 330 lodges, the total will exceed £5.5 million.

Yes, these are pretty glib statistics, but they illustrate the dramatic impact that RPP’s can make.

All brethren will be sent a combined Gift Aid declaration  /  RPP / single donation and Direct Debit Mandate form.  All Charity Stewards will be given a further supply.  Charity Stewards will be supplied with a return listing brethren who have and have not signed a Gift Aid declaration.  Charity Stewards should ensure that all brethren who have signed a declaration are given the opportunity to enter into a RPP.  The combined  form should be used.

How do I deal with one-off donations?

Again, you will be giving each brother a combined form and this can also be used to make a one-off donation. 

Subsequent one-off donations can be made on a similar form (Charity Stewards will have a supply) or quite simply by putting cash or a cheque payable to “The Grand Charity” into one of his personal envelopes and passing it to his Lodge Charity Steward.

How do I deal with Lodge collections (including alms collections)?

Some Lodges use their alms collections to add to their own Lodge Relief Chest balances.  Others may hold separate collections either in Lodge or at the festive board.  If so, it is up to each lodge to decide whether they wish to continue this pattern and whether the collection is for the Lodge Relief Chest or for Essex 2011 Relief Chest.

Whether it is for the Lodge Relief Chest or the Essex 2011 Relief Chest should be stated in open Lodge immediately before each collection is taken.  It is in fact possible to operate a hybrid so that brethren with personal envelopes can donate direct to Essex 2011 whilst all other cash collected goes to the Lodge’s own Relief Chest.

If the collection is for the Lodge Relief Chest only, personal envelopes should still be used, and the Lodge Relief Chest number should be entered on the declaration form.  In that event, the tax will be reclaimed under the Gift Aid declaration.

Many lodges dedicate specific collection to other worthy causes, such as the NMSF or the Essex Provincial Fund.  It is no part of the Essex 2011 Festival to divert funds from these worthy causes and these dedicated collections should continue as before.

As a procedural matter, if personal envelopes are used in a Lodge collection, they should be opened only by the Charity Steward who should retain the envelopes to forward to the Grand Charity with the return form.  This is because the level of a brother’s giving is a personal matter, known only to the Charity Steward.

How do I deal with money raised from the holding of social events, barbecues, dances etc?

Here the principle is that because something is being supplied in exchange for the ticket price – food, entertainment and possibly drink.  Because of that it is not normally possible to treat the entrance money as being paid under Gift Aid. 

If a raffle etc is held at the same event, it is similarly unlikely that any part of the raffle will attract Gift Aid.

If you intend running a Sponsored or Fund Raising Event in support of the Festival 2011, could you please liaise with your Centre Representative. The Committee and the Festival Media Officer will be pleased to help in your efforts.

How do we deal with sponsored activities?

Pure sponsorship is where the sponsors agree to pay a specified sum if the sponsored individual completes a specified task.  This task can be a physical feat such as a run or cycle ride or it can be over a period of time such as a weight loss over a specific period.

Because the sponsor receives nothing in return for his money, his sponsorship is a pure donation and Gift Aid can apply.  Essex brethren who have made a valid declaration should make payment in one of their envelopes.  However, sponsorship does give the sponsored individual an opportunity to raise funds from the general public, for example from relatives and workmates.  Many of these will be taxpayers in their own right and their contributions can be made under Gift Aid 

The design of the form should therefore give sufficient information about the sponsor to satisfy the Gift Aid rules and allow the sponsor to indicate whether he wishes to make a limited declaration in respect of his donation.

A specimen form is included with the Charity Stewards pack.  There should be no departure from the format of this form unless the amendments are cleared in advance by the Committee.

On completion of the event, the original sponsorship form should be sent to The Grand Charity along with the proceeds, the normal return and any Essex 2011 envelopes received from Essex brethren.

In no circumstances should such a sponsored event be combined with any other activity unless the whole process is conducted wholly outside Gift Aid.  For example, adding a draw by which sponsors can win a prize would completely invalidate Gift Aid which should not be used in those circumstances.

Can Gift Aid apply to Raffles, Lotteries, 100 clubs and similar?

The short answer is “No”.

There are ways in which participants can buy a raffle ticket and make a separate donation, whereby the latter can qualify for Gift Aid.  These arrangements have to carefully documented and any costs have to be met completely out of the ticket proceeds, not the donations.  They should in addition be used only where the participants are a closed group such as those attending a particular lodge meeting.  These arrangements should never be used for a lottery open to the general public.

Unless the Charity Steward is fully conversant with the mechanics of these arrangements he should run all raffles etc on the basis that they are outside the Gift Aid arrangements.

How do I deal with Jumble sales, Bring and Buy stalls and other similar stands?

Following the rule that Gift Aid does not apply where the person making the payment receives value in return, no payment made by a person for an item on such a stall can be subject to Gift Aid. 

Due to the large number of items and relatively small value, it is difficult to devise arrangements which would satisfy the Gift Aid conditions.

Can auction proceeds fall within Gift Aid?

Again, following the rule that Gift Aid does not apply where the person making the payment receives value in return, no payment made by a person who purchases an auctioned item can be subject to Gift Aid. 

However, the owner of the item is in a different position.  Consider the following two examples.  The first is where a painting is donated to the Lodge to be auctioned at a future event.  The painting realises £250 which thus belongs to the Lodge.  It can be paid into the Essex 2011 Relief Chest and the Lodge will be credited with £250.  The second situation is where the owner asks the Lodge to auction the painting on his or her behalf and undertakes to donate the proceeds to Essex 2011.  The painting realises £250 which belong to the original owner of the painting. As long as he is eligible he can donate them to Essex 2011 under Gift Aid (using the envelope scheme if he is an Essex brother who has already signed a declaration).  The Grand Charity can reclaim £70 to add to the £250.

If this approach is adopted the paperwork should be correct.  It is advisable to obtain a signed instruction from each vendor requesting the lodge to sell XYZ on his behalf and stating his intention to donate the proceeds to The Grand Charity for Essex 2011.  After the sale, it is recommended that the proceeds are actually paid to the vendor if received by cheque and a further cheque then paid to Grand Charity by the vendor.

Need help with organising your Lodge? In the first instance email your enquiry to:

Essex 2011 Festival email helpline help@essex2011.org.uk  or phone helpline 01206-385364 (24hr answerphone)

All information on this website should be considered as copyrighted.  No information should be published without the express permission of the organising committee or its members.

"Essex 2011" Provincial Grand Charity Relief Chest number: E1004B