Special purpose funds

Special purpose funds (SPFs) hold charitable donations to be used for a specific department or service at the Royal Free London NHS Foundation Trust (RFL). The Royal Free Charity (RFC) is responsible for ensuring expenditure from funds fit within our charitable objectives: 

For the benefit of patients through improving: 

• patient experience
• staff welfare
• clinical services, including the provision of medical equipment
• supporting locally led research and development. 

SPFs are not individual bank accounts and cannot be used to bypass the charity, trust or UCL policies, processes or procurement routes. The guidelines in this document are aligned to both the charity and trust processes.

This section sets out the roles and responsibilities of the Royal Free Charity, its trustees and fund signatories. 

Charity role

Charity regulations, which govern the use of SPFs, are overseen by the Charity Commission. The charity reports annually on the performance of all charitable expenditure. We are audited every year and must publish our accounts on the Charity Commission’s website. 

The role of the charity’s trustees 

The role of a charity trustee is to make sure that the charity complies with its governing document; complies with charity law requirements; and other laws that apply; ensures the charity’s assets are only used to support or carry out its purposes and avoids exposing the charity’s assets, beneficiaries or reputation to undue risk (https://www.gov.uk/set-up-a-charity). 

Trustees devolve the management of SPFs to charity staff, and staff reserve the right to: 

• prevent the withdrawal of funds which do not meet the conditions set out in these guidelines.
• authorise expenditure from a fund if the charity believes it is an appropriate use of resources.
• decline expenditure from a fund if it is perceived to be outside of the guidelines or contrary to the charity’s governance or national laws.
• appoint an alternative signatory or take control of the funds directly if they believe the guidelines are not being met.
• amend the guidelines as and when necessary.

The role and responsibility of fund signatories

Each SPF is required to have at least two signatories who are employees of the trust or who have honorary contracts. Signatories must be of a similar staff grade to each other. For instance, a consultant’s co-signatory must be another consultant or a senior manager. The charity staff delegate responsibility to fund signatories and as a signatory they are accountable for:

• actively managing the funds in line with the guidelines. As and when guidelines are updated the charity may request fund signatories to confirm they have received and read the new guidance.
• spending the fundraised income in line with the established objectives of the fund – this includes notifying the charity of any proposed expenditure over £20,000 and providing spend plans for the expenditure.
• spending fundraised income in a timely way. Charity Commission guidance requires that at least 25% of donated funds to the charity must be spent each year. Signatories must ensure 25% of the opening balance of the fund is spent each year (unless an approved project with spend plan is in place).
• raising additional income. If fund balances drop below £2,000 the charity reserves the right to close the fund if there is no agreed income or expenditure plan.
• informing the charity of any expected donation over £2,000, or any donation where a written agreement is required (for example, to meet requirements of a third-party funder or restricted gift). 

The charity, not the fund signatory, has the full legal responsibility for the funds, including ensuring that all monies are received and spent in accordance with charitable law and all statutory requirements.

A conflict of interest is a situation in which a fund signatory’s personal interests, or interests relating to the income or expenditure of the fund result in a clash that may require the charity to protect the integrity of the signatory role in respect of charitable donations. 

This example list of conflicts of interest is not exhaustive but includes: 

• any involvement in any body making donations to the fund where the signatory may personally benefit
• a donation from a close relative
• a donation from an organisation or body where the signatory holds a position in any paid or voluntary or advisory capacity.
• a signatory’s business, family members or friends, are personally supplying services and the signatory wishes to pay them from the fund
• where any portion of a signatory’s salary is paid from the fund.

Please see table: What can and cannot be paid into an SPF? for information about consultant private practice income donations. 

The fund signatory must notify the charity of any conflicts of interest. Any disclosures of interest will be reported to the charity’s trustees, who will take a view as to whether the conflict of interest is properly and openly managed. They may decide that the individual should be removed as signatory, or that expenditure claims are signed off by alternative signatories if deemed appropriate.

Signatories are not permitted to sign-off their own expenditure reimbursement requests.

The charity provides practical support to fund signatories through the SPF administration team and the dedicated SPF inbox [email protected]. Please use this as the first point of call for all enquiries and expenditure processing. Each month, statements are sent by email to the signatories of each fund, who should check that the information is accurate. Any queries or discrepancies should be reported to [email protected] who will liaise with the charity finance team if required.

Managing committed expenditure

Signatories are responsible for ensuring that funds do not become overdrawn and the balance covers all expenditure including commitments for restricted projects, research projects and associated salary costs. The charity will move committed expenditure from the fund’s available balance and ring-fence it in the charity’s accounts. This has the benefit of:

• ensuring the fund balance shown on the monthly statement more accurately reflects the available balance
• keeping committed money separate from other money in the fund
• ensuring donations for restricted projects and research projects are ringfenced in our financial accounts.

If a negative balance arises, the charity will stop all payments from the fund until a credit balance is restored. The charity is not liable for any overspend from funds.

The charity invests its funds, including those held in SPFs, across a diversified portfolio of property, equities, bonds and cash. While investment gains were historically shared with SPFs through annual payments, all losses were absorbed by the charity’s free reserves. Under the current approach, adopted in 2022, SPF balances are preserved and the Board of Trustees now assumes full responsibility for both the risks (loses) and rewards (gains) of investment performance.

Admin charge

The charity incurs a range of costs to effectively administer over 200 SPFs. This includes costs associated with financial processing, the use of banking facilities, audit and legal costs. In addition, the charity incurs costs across other departments involved in the management of funds and therefore we apportion part of our running costs against each fund by way of the admin fee. This allows the charity to recoup a proportion of the costs necessary to effectively administer its SPFs.

From 1 April 2025, the charity will increase the admin charge to 3.5%. This will be levied on the fund balance, including all commitments (grants awarded from the fund and ring-fenced commitments). The admin fee will be charged monthly instead of as a lump sum at the end of the financial year. The change in timing does not affect the calculated total. Previously, 12 monthly balances were used at the end of the year to calculate the full year admin fee. Now, one month’s worth of the admin fee will be calculated each month based on that month’s balance. 

This charge is benchmarked against other NHS charities who administer similar funds on behalf of NHS trusts, to ensure the amount we charge is fair and proportionate. The charge is subject to review on an annual basis.

Please contact [email protected] to discuss opening a new fund. New funds are only opened in exceptional circumstances.

Dormant funds 

Funds are considered dormant if there has been no income or expenditure for a 12-month period or if funds are just accumulating. In these instances, we will make every effort to work with signatories on a spend plan. However, if funds have not been used effectively without good reason, the charity reserves the right to assume direct control of the funds and determine the best way to apply them in a manner compatible with charity law and the fundraising code of practice.

Signatory retirement or leaving the trust employment 

After leaving the employment of the trust a signatory may not remain without the charity’s approval. This will only be granted if the signatory holds an honorary contract with the trust or UCL and is either carrying out research in line with the purpose of the fund or is involved with treating NHS patients. 

Money donated to the charity may not be transferred to another organisation when a signatory leaves the trust. This includes consultant donations from private patient fees.

All income paid into a SPF must be charitable; not commercially generated; and given freely, under no obligation by: the donor. 

Please contact [email protected] for bank details, donor support and further guidance on how donations can be made into an SPF. Cheques should be made payable to ​“Royal Free Charity fund xxx” and the fund number should be referenced on all correspondence to ensure the money is credited to the appropriate fund. 

When income appears on our bank statement the purpose is not always clear. Therefore, if a signatory is expecting money to come into a fund, please inform [email protected]. Unknown donations where we have been unable to identify the correct fund number after three months may be credited to the charity’s general funds and considered unrestricted; these funds may not be available to be transferred to an SPF at a later date.

The charity is required to carry out due diligence on all donations over £10k to reduce the risk of accepting a donation which may later bring the charity and trust into disrepute. The charity has a gift acceptance policy to enable this. By notifying us in advance of a donation, this can be signed off before income is received.

Restricted and unrestricted donations

Unrestricted donations are those given freely to an SPF but for general use in line with the purpose of that fund. Restricted donations are those given freely but for a restricted purpose or specific service or project, and usually within a specified time period, for example, research funding from pharmaceutical companies or grants from third-party funders.

These donations are likely to require a contract or gift agreement to be in place. The charity should be informed in advance if a restricted donation is expected, and independent evidence will be required before the money will be credited to the fund to ensure the required formal agreements are in place and documentation is held on file. See also roles and responsibilities of the charity and fund signatories and table what can and cannot be paid into an SPF?

The charity considers third-party income to be where a contract or grant award will be in place and there is an expectation of delivery in return for funding. In all cases, you must inform the charity before agreeing to receive the funds in order to ensure this is not commercial income or sponsorship. The charity cannot accept commercial income and may decline the income or return it to the company if it does not meet the requirements of our gift acceptance policy. See table what can and cannot be paid into an SPF?

If the income is acceptable, the charity must be cited as the recipient of the funds on the contract, but holds no liability. The following clause must be included in the contract:

“The Royal Free Charity is acting as the recipient of these funds. The Royal Free Charity holds no liability, and it is the RFL/UCL (delete as appropriate) that is ultimately responsible for the fulfilment of the contract and holds all liability. This includes delivery and financial contractual obligations.” 

Once the contract has been signed a copy must be received by the charity before any income is accepted. 

The trust/​UCL is ultimately responsible for fulfilment of the contractual agreement. 

The income must also be declared on the trust’s declaration platform: royalfree.mydeclarations.co.uk/home

Thanking donors

The charity prioritises donor stewardship and therefore wherever possible a letter of acknowledgement and thanks will be sent on receipt of a donation. The charity may at times contact signatories to help identify unknown donations. 

When a donor is known to a signatory, please ensure that you have the donor’s permission to pass their details on to us, and let them know that you are doing so, in order that we can appropriately acknowledge their gift. 

Good donor stewardship enables us to build longer term relationships with supporters. In addition, where a donor has specified a particular use for their gift, and where this has been agreed, then it is best practice to report back to the donor on the impact of their donation.

Please read the following guidelines before accepting any income into an SPF. If you have any questions regarding income or donations, please email [email protected] who will be able to provide guidance.

Table : What can and cannot be paid into an SPF / unrestricted

UNRESTRICTED INCOME

Given freely with no legal restrictions or formal agreement/​contract

RESTRICTED INCOME 

Given freely for a specified purpose, usually requiring a contract agreement or gift agreement – MUST BE pre-approved by the charity before receipt

Donors who are UK taxpayers should be encouraged to use the Gift Aid scheme, which increases the value of the gift at no cost to the donor. The charity fundraising team contacts donors where appropriate and asks that they complete a Gift Aid form if eligible. From July 2022 all tax relief claimed in this way is credited to the charity’s general fund and not to individual funds. This income is used to support the charity to provide its core services to support the patients and staff of the trust. This does not apply to donations made by consultants into their funds.

Fundraising

If you would like to discuss fundraising for an SPF, please contact [email protected] or visit the fundraising page on our website. Any costs associated with holding or running a fundraising event will come out of the SPF. 

If you are hoping to solicit gifts of £10k+, please contact the charity before negotiating the terms of the gift. We can support you to shape this appropriately, ensuring the donor’s expectations are managed from the start and delays to the gift reaching you are reduced. 

For smaller donations please encourage the donor to visit the charity website to make a donation towards general charity funds where appropriate. 

To pay money into an SPF please contact [email protected], and they will provide our bank details and alternative payment options. The relevant fund number must be referenced on all correspondence to ensure the income is accrued to the correct fund. The charity accepts cheques, but these must be made payable to ​‘Royal Free Charity Fund xxx’. Cheques made payable to the trust cannot be accepted.

Engaging supporters: If a patient or visitor expresses a wish to donate or fundraise to thank the hospital, please mention to them that the charity can support them. You can introduce us via email or provide them with our contact details and we can discuss their wishes with them. Our fundraising team is experienced in donor stewardship and aims to build long term relationships with supporters. They can also support with any donation or fundraising queries that may arise. Please contact [email protected].

While day-to-day fund management is delegated to signatories, the trustees remain ultimately responsible for the use of charitable funds. A purpose is not charitable if it is wholly or mainly for the benefit of specific individuals. All expenditure must meet the charity regulations which govern the use of SPFs and are overseen by the Charity Commission. This includes charity fund accounting regulations and compliance with HMRC. All money sitting in an SPF is considered charitable funds. Charitable funds cannot be used for anything that should be NHS funded or covered by your departmental budget.

Timeframe and target expenditure

At least 25% of the opening balance of the fund should be spent each year (unless an approved project with spend plan is in place) see roles and responsibilities of the charity and fund signatories. The charity may request more than 25% is spent if the income in the fund is committed to an approved project, or to meet the requirements of the gift agreement. Note that in this case the starting balance of the donations would be used not the annual starting balance of the SPF. 

The exception to this is when a SPF is accruing funds to be spent on a project. In this case we would require a project spend plan setting out the expected start and end date of the project, and expected expenditures, to ensure that funds will be actively used in a timely fashion. 

Claims for payment or reimbursement should be made immediately. If claims are not made within four months of the expenditure the charity reserves the right to refuse the backdated claims.

All requests for expenditure must be signed and countersigned as follows:

• up to £5,000 – one signatory
• above £5,000 and up to £50,000 – two signatories
• above £50,000 – two signatories and the charity CEO
• above £100,000 – two signatories and two trustees 

There may be occasions where we ask for additional approval at a higher level in the trust (for example, clinical or divisional director) to ensure that expenditure is aligned with trust priorities. Signatories are not permitted to sign-off their own expenditure reimbursement requests.

As of 1 April 2025, the charity has updated its research funding governance as a result of joining the Association of Medical Research Charities (AMRC). 

The following is the required process: 

1. Submit an application: 

• Any research funding from an SPF above £5,000 will require a research application.
• This does not mean that research funded from SPFs will be open to competition, however this step ensures that research has gone through the required quality review process. 

2. The application will be reviewed by the charity’s research review panel and, where necessary, peer reviewed. 

3. Once approved, the research funded from SPFs will be awarded as a grant and will follow the charity’s post-award process. 

Please email [email protected] to request a research application form.

Equipment including medical equipment

All equipment including medical equipment must be purchased via the trust or UCL procurement system. This is: to ensure it is approved for use; to guarantee any insurance policies; to ensure ongoing consumable and maintenance costs are considered and covered; to ensure the charity identifies VAT exempt or zero-rated items and provides the appropriate VAT exemption certificates where applicable. See VAT exemption. 

All equipment purchased with charitable funds will become the property of the trust /UCL. The charity will not cover ongoing service or maintenance costs outside of original purchase agreement and will not normally pay for equipment which will not ultimately belong to the trust/​UCL.

The table below sets out expenditure permitted from funds, and any expenditure must fit within the objectives of the fund (for example for staff welfare or patients or research). 

The charity is committed to supporting RFL’s Green Plan and commitment to delivering a net zero NHS. Sustainability and environmental impact should be considered for all expenditure. More information can be found here freenet2.royalfree.nhs.uk/SitePage/68643/greener-royal-free:

Permitted expenditure table

Please check Freenet for guidance on purchasing though PECOS. For assistance using the e‑procurement system please email the helpdesk: [email protected]. 

It is important when ordering through PECOS that it is explicitly clear the item is being purchased with charity funds to ensure the expenditure does not come out of your departmental budget, and can be VAT exempt where applicable. Please email [email protected] for instructions. 

Anyone engaged with suppliers must go through trust procurement. For assistance with trust governance processes required, please liaise with the trust.

Invoices

It is important that all invoices are addressed to: 

Royal Free Charity

The Pears Building

Pond Street 

London

NW3 2PP 

Please ensure the RFC fund number is clearly referenced on the invoice. 

If you have a ring-fenced grant award or spend commitment, please ensure your supplier matches what we have on record. Please email [email protected] for assistance.

Expenditure claim process

All receipts for reimbursement must be VAT receipts and not card payment confirmations, these are not HMRC compliant. All payment requests must come from an NHS or UCL email address. 

Please email [email protected] for payment request forms. 

VAT exemption 

There are tax benefits for purchasing from SPFs; this relates to the zero rating for VAT purposes of certain medical, scientific, IT, sterilising, laboratory and refrigeration equipment provided it is used for medical purposes: research, training, diagnosis or treatment. This includes certain hospital grade furniture. Therefore, these items must be purchased via the PECOS e‑procurement process. Failure to identify the item as charity funded at the ordering stage means we (your fund and the charity) will pay VAT at full rate of 20%. For example, a £5,000 purchase would solicit £1,000 in VAT which could otherwise be used for further charitable expenditure.

Informing others that SPF funding supported a project helps demonstrate impact. This helps the charity secure funding in the future and encourages supporters to donate. 

The charity requires an acknowledgement of funding in any material created about a funded project or initiative. As a minimum, this means displaying our logo and a funding statement, which should be displayed on all printed and digital materials and products. This includes – but is not limited to – publications, promotional material, reports, conference presentations and posters. For any support or materials please email [email protected].

Key requirements: 

• The Royal Free Charity logo should be displayed on all materials. The logo will be supplied by the charity’s communications team along with the brand guidelines.
• Our preferred wording for acknowledgement should use the long form version wherever space allows.
• Long form: The initiative is funded by the Royal Free Charity thanks to the generosity of supporters and donors. Short form: Funded by the Royal Free Charity. For journal articles funded by an RFC research grant, the charity should be acknowledged as ​“This work was supported by the Royal Free Charity [Grant number xxxxxx]”.
• For research grants, the charity must be informed in advance of any articles or presentations from the grant outputs when they are accepted for publication and before they are put in the public domain. The grant holder must ensure that copies of the articles (based wholly or in part on the grant) are forwarded to the charity promptly.

The charity’s funding should be acknowledged in all proactive media relations. Where the charity is the sole or main funder, press releases should be produced and issued jointly by the communications teams of the trust and the charity (and UCL if appropriate).

If you’re directly approached by a journalist requesting information about your funded project, please contact both the trust and charity communications teams: [email protected], [email protected].

Plaques/​badging 

If the charity has provided significant funding for a capital or infrastructure project or piece of equipment, it may be appropriate to display a plaque or a badge acknowledging that support. For further guidance, please contact the charity’s communications team, [email protected]. 

Charity communications 

The charity may share stories about funded projects via its newsletters, annual reports, website, social media or other media opportunities. The charity’s communications team may contact SPF signatories to find out further details or ask for photos, quotes or interviews. Signatories are asked to co-operate on these occasions.

IP requirement 

No rights to any intellectual property arising from an SPF funded project may be sold or otherwise transferred to a third-party without the charity’s written agreement. If, as a result of a project, ideas, processes or products of potential medical, scientific, commercial or other value are generated, you, the trust/​UCL, or its third-party technology transfer partner will enter into a separate agreement with the charity on patent, design or copyright protection and ownership; disclosure of information acquired or obtained; and/​or sharing of financial returns. 

Please email [email protected] for full details.

As our SPFs are either specific to an area of disease or a department, please check with your department head whether there is one for your department/​area of work. If unsure, please email [email protected] and we can investigate what might be available.

Not all departments have an SPF as they are created uniquely from the donations the charity receives. If you’d like to fundraise for your department, please contact our fundraising team who can assist you at [email protected].

All expenditure must fall into one of the approved expenditure categories in our SPF guidance, and be in line with the purpose of the fund. If in doubt about a potential expense, please email [email protected]. Expenses that are not approved will not be reimbursed.

Anything that sits outside the defined purpose of the fund and special purpose fund guidance. We cannot fund:

• Staff entertaining
• Christmas parties
• Payments or gifts to individual patients
• Payments or gifts to staff (*see guidance for retirement gifts)
• Degree or master’s course expenses (*with the exception of funds with the stated purpose of education)
• There are restrictions on the purchase on gift vouchers

If you have any questions, please contact [email protected] for guidance before making a purchase. Expenses that are not approved will not be reimbursed.

If you’re not the signatory, please contact the signatories of the fund to ensure they authorise the expenditure. Signatories are designated individuals who manage the expenditure of the fund and ensure it is in line with guidance and the purpose of the fund.

If you need assistance, please contact [email protected] and we can advise.

Please use the documents below to help you in submitting your claim. Ensuring that you have submitted all the correct documentation will ensure your claim is processed as quickly and efficiently as possible.

• How to make a claim
• Acceptable receipts and invoices
• Supporting documentation required

Please allow 30 days for the funds to be received if submitted with the correct supporting documentation. If supporting documentation is not received, or scans are unclear or cannot be read, this will delay processing times.

Payment runs happen every two weeks on a Friday, and it takes three working days to reach a recipient bank account from the date of RFC making the payment.