General Election 2024

Read our updates on issues relevant to charities for the upcoming election. Learn more

Controls on income

This page is free to all

Due diligence policy on accepting funds

The Charity Commission expects organisations to know that their money is coming from somewhere reputable, and their Compliance toolkit: Chapter 2 (pdf, 875KB) gives guidance on what actions you should responsibly take.

You might find it useful to define what would cause you to research a donor (eg size of donation, unknown donor, type of conditions attached) and have a policy that in those circumstances you will answer the questions on Know your donor: Tool 6 (pdf, 105KB) to determine whether you can accept the funds.

Pricing, invoicing and debt control


Many organisations have such a mix of services, or so many one-off contracts that a generic pricing policy would not be relevant.  In this case (if you don’t already have one) you might want to create a set of questions/criteria to assess new projects that includes a review of pricing.  Your pricing policy could then be that all new projects of a particular size have to be signed off using those criteria.  Or you could simply say that all prices for services have to be approved by the chief executive or board of trustees.

When you are pricing a service you need to understand the costs, but you do have other considerations, principally - what is the primary objective in carrying out the activity, is it fundraising or is it a charitable activity? 

If it is a charitable activity – you then have to think about what the purpose is in charging. You might be looking for anything from full cost recovery from a funder to a contribution to costs, to sufficient incentive to users to make them value the service and turn up. 

So you may want to have a policy which sets out some parameters such as:

Invoicing and debt control

To have control of your organisation’s money, you need to know what invoices and requests for payment have been sent out in your name, and that they contain all the correct details, so it is good practice to have them approved and issued in a standard format.  There are invoice templates on Word and Excel that you can add your logo to, or if you have an accounts package, it may do invoicing for you.

If you don’t have a system that generates invoices for you, it would make sense to have them issued by one person who can then easily keep a central list of who owes you what and by when. 

It does not matter who you decide should chase unpaid invoices, but it is vital that someone has responsibility for ensuring that it happens.  It often falls to the finance team by default, but it may work better for you if the contact is through the member of staff who has a relationship with the paying organisation, or if a senior member of staff takes on the role if it becomes difficult.   

You need to decide what action you will take if people don’t pay.  This may depend on what kind of service you deliver, or who isn’t paying.  You might suspend services till the debt is cleared, you might seek board approval to write off the debt.  You know your organisation.


Grant applications should be a collaborative process between operational and finance staff, like any plan, which is why it is recommended that you include a section on grants within your financial procedures.

As with pricing, a new projects assessment checklist is a useful discipline when you are putting together a grant application, and helps with communication and management of expectations.

You need to decide who can make and approve grant applications and whether you expect grant funding should include full cost recovery.

You are likely to have processes for ongoing grant management, and you need to ensure that they include clear lines of responsibility for triggering stage payments (often via reports from project staff) and following up on non-payment (finance staff will need to highlight this).


It is important to identify who will be responsible for managing any legacy administration, which can last for years, and to make sure that if you are notified of a legacy there will be someone who will chase it regularly.

Last reviewed: 30 May 2017

Help us improve this content

This page was last reviewed for accuracy on 30 May 2017

Back to top

Sign up for emails

Get regular updates on NCVO's help, support and services