Understanding what’s admitted—and what is not—is crucial for permissible compliance and asserting public trust. In this blog, we investigate how CLGs can legitimately fundraise, prevailing restrictions, and best practices to guarantee transparency and responsibility.
What is a CLG and Why Fundraising Matters
A Company Limited by Guarantee (CLG) is a type of legal structure primarily used for non-profit organisations, like:
- Charities
- Community groups
- Clubs and organizations
Unlike shareholding companies, CLGs do not allocate profits to members. Instead, some surplus is reinvested into achieving the association’s stated goals. Since they often depend on external capital to operate, fundraising is a key source of income.
Types of Fundraising CLGs Are Allowed to Engage In
CLGs have access to various legitimate and obedient fundraising methods. These contain:
1. Donations
- From individuals, associations, or philanthropic endowments
- Often tax-deductible if the CLG is a recorded charity
2. Grants
- Offered by governments, NGOs, or private establishments
- Usually tied to distinguishing projects or programs
3. Sponsorships
- Corporate partners may fund events or exercises in exchange for branding or public attention
4. Membership Fees
- CLGs can charge annual or monthly salaries for members to support legislative and program costs
5. Fundraising Events
- Events such as galas, generosity runs, or auctions
- Must comply with local standards, especially if betting or raffles are involved
6. Merchandise and Services
- Selling branded products or duties (e.g., education programs, educational materials)
- Revenue must be used to further the CLG’s responsibility
What’s Not Allowed (or Restricted) in CLG Fundraising
While CLGs enjoy relative adaptability, there are clear limits and boundaries they must not cross:
1. Distributing Profits to Members or Directors
- CLGs cannot classify surplus funds as profits
- Directors or guarantors should not benefit independently from donations or fundraising income
2. Unlicensed Fundraising Activities
- Public collections or street fundraising may demand a special license or permit
- Operating without appropriate approvals can bring about penalties
3. False or Misleading Claims
- Any exaggeration about the impact or use of funds is illegitimate
- All marketing and promotional materials must be accurate and transparent
4. Political Donations (Unless permitted)
- Many jurisdictions confine CLGs from making political offerings
- If the CLG is a registered charity, political impartiality is often necessary by law
5. Aggressive Fundraising Tactics
- High-pressure sales methods, especially on weak individuals, are immoral and may be illegitimate
- Cold calling and marketing mail must comply with the information privacy societies
Compliance and Transparency: Key to Sustainable Fundraising
To build trust with donors and stakeholders, CLGs must guarantee:
- Clear recordkeeping of all donations and income
- Annual commercial reporting, frequently submitted to managers like Companies House or charity commissions
- Disclosure of donor impact—how resources are used and what effects were achieved
Tips for Responsible Fundraising:
- Use an inscribed fundraising policy. You can also get help from company incorp sg
- Train the staff and volunteers on the agreement and ethics
- Register accompanying the relevant authorities before initiating large-scale campaigns
- Consider third-party audits for commercial transparency
Conclusion
For CLGs, fundraising is not just about generating earnings—it is about accountability, responsibility alignment, and permissible compliance. By experiencing what is permitted and what is not, your organisation can raise earnings ethically, maintain public trust, and stay focused on making a difference.
Whether you are a charity or a public enterprise operating as a CLG, staying informed guarantees that your fundraising activities continue compliant and persuasive.
