1. Application
1.1. St. George’s, University of London (the “University” and with the Trust referred to as “St. George’s”) and St. George’s University Hospitals NHS Foundation Trust (the “Trust” and with the University referred to as “St. George’s”) understand that crowdsourcing is increasingly used as a means of fundraising for research and development. The manner in which funds are raised and applied to the projects at St. George’s is governed by our research ethics committee and the JREO. This policy outlines the standards we require staff to observe when crowdfunding and the circumstances in which the Trust and/or University will monitor use of alternative fundraising platforms and the action we will take if this policy is breached.
1.1. This policy applies to all individuals, including employees, officers, workers, agency workers, consultants, contractors, students and casual workers (referred to as ‘staff’ in this policy).
1.2. This policy should be read in conjunction with the policies relating to research ethics and investments.
1.3. Except where otherwise stated, this policy does not form part of any contract of employment and the University and/or Trust may amend it at any time.
1.4. The Director of the JREO is responsible for monitoring and implementing this policy. If you have any questions or comments on this policy, please contact the JREO
2. What you can and cannot do
2.1. Permissible activity:
(a) You may undertake donation-based crowdfunding. This is where people give money to enterprises or organisations whose activities or purchases they want to support.
(b) You must at all times ensure that you have complied with the usual requirements for undertaking a research project such as obtaining prior ethical approval, have had your research properly costed by the JREO, etc. Seek advice from the JREO if in doubt.
2.2. Prohibited activity:
You may not undertake except with explicit written prior approval of the Director of the JREO acting on the authority of the RSC:-
(a) Pre-payment or rewards-based: people give money to receive a reward, service or product (such as tickets for an event, an innovative product, a download of an ebook or a new app).
(b) Exempt loans and investments: people invest or lend money using organisations or investments that satisfy the requirements in statutory exemptions to be considered exempt from the need for FCA authorisation or regulation (such as Enterprise Schemes or withdrawable shares issued by Industrial and Provident Societies).
(c) FCA regulated loan-based: people lend money to individuals or businesses in the hope of a financial return in the form of interest payments and a repayment of capital over time (this excludes some business-to-business loans).
(d) FCA regulated investment-based: people invest directly or indirectly in new or established businesses by buying shares or debt securities, or units in an unregulated collective investment scheme.
3. Process
3.1. Announcements
(a) All Projects must receive written approval from your Head of Institute (if you are in the University) or Head of Department (if you are in the Trust).
(b) Publicity materials requiring the use of either the University and/or the Trust name, resources (inc Staff) must be approved in advance. The JREO’s Enterprise Team may provide further advice or direct you to someone who can advise further.
(c) Personal and social networks may be used to drive traffic to their crowdfunding page. Email lists used in support of any crowdfunding campaign will not include the University’s and/or Trust’s alumni donor database or from any other centralised University/Trust email list, unless authorised to do so, taking account of St. George’s Data Protection Act 1998 obligations. Further advice may be obtained from either the University’s and/or Trust’s Data Protection Officers.
(d) The use of either the University’s and/or Trust’s names or trademarks on the Crowdfunding Platform is only permitted by prior written consent of the either the University or Trust whichever is the party whose trademarks are proposed to be used.
(e) You are responsible for all campaigning activity related to the Crowdfunding and will not normally draw on University or Trust financial or human resources without prior approval.
(f) Written consent must be sought and given by anyone appearing in promotional material.
3.2. Contract
(a) The terms and conditions of the Crowdfunding Platform must have been approved in advance by the JREO
3.3. Finances
(a) Only once the target fundraising sum has been raised the proposed project may be submitted to the JREO for ethical approval and/or HRA approval before proceeding. If the target is not met then St. George’s will not accept the funding for the project which will not proceed.
(b) JREO pre-award will need to approve that the project has been costed by the JREO at an overhead rate determined by the JREO.
(c) The financial risks and costs associated with conducting the crowdfunding campaign, and potentially needing to return any funding need to be considered. Where required, the Institute Director needs to approve any contingency funding to be ring-fenced from Institute funds.
(d) Any funds raised are institutional funds and will be administered by the JREO in accordance with their standard procedures. For example, funds raised will normally be held in an ear-marked account in the JREO and will not be available to spend unless or until there is sufficient money to run a successful project. If the target is not met funds will be allocated to SGUL reserves for use in accordance with the Institution’s overall charitable purposes of advancing teach and research.
(e) Tangible items that are delivered to Donors are not normally offered. The University and/or the Trust will not warehouse items, finding the item ordered, package it, and shipping it to the right address. Projects should usually demonstrate the benefits of donating at different levels without offering material benefits. If benefits are promised, you must ensure that these can be delivered.
(f) You may not provide tax or financial advice to donors. For example, promising any returns on donations or investments. Financial advice is a FCA regulated activity for which we have no licence.
(g) You may not issue securities to participants, nor may you operate or market a Crowdfunding Project as an investment vehicle.
3.4. Post-Award
(a) If the target budget is met, JREO post-award will liaise with the Crowdfunding Platform to set up the appropriate mechanism for receiving funds.
(b) Funds raised via Crowdfunding for a specific Project may only be used for that purpose
(c) When the funds are placed in a University or Trust budget it will be treated as Institution funds ring-fenced for the purpose.
(d) You must follow procurement rules and finance regulations for goods and services required for your Project.
(e) Each Project Leader must provide the Institute Director a final outcome report and must make this report available to donors and shall include at least the following information for each Project:
- time period of execution;
- your name and others involved;
- amount of funds targeted;
- total funds raised and amount of proceeds contributed to SGUL;
- total expenses incurred by the Project;
- any other informative details about the Project.
4. Due diligence guidance
Ensure you can satisfactorily answer the following questions:-
4.1. Be aware that the Finance Conduct Authority (FCA) regulates the most popular crowd-funding activities including:-
(a) Loan-based crowdfunding: core FCA provisions apply, including conduct of business rules (in particular, around disclosure and promotions), minimum capital requirements, client money protection rules, dispute resolution rules and a requirement for firms to take reasonable steps to ensure existing loans continue to be administered if the investment vehicle goes out of business.
(b) Investment-based crowdfunding: there are limits on the ability of firms to promote these platforms and a requirement that, where no advice has been provided, you must check that investors understand the risks involved.
4.2. The significant risks of crowdfunding projects mean that the following types of people may be approached:-
(a) professional clients – e.g. companies who invest in research and development activities;
(b) individuals who are advised by professional advisers e.g. accountants – to ensure that funds are given to the crowdfunding have been ethically sourced not, for example, taken from a vulnerable person;
4.3. Your project must be appropriately described in a manner that is suitable can be understood by a lay audience but also withstands expert, peer and media scrutiny.
4.4. Has your project been properly costed to be feasible within the budget? If only part of the money is raised, is your project feasible on a smaller scale? What if the goal is exceeded?
4.5. Are the fees of the Crowdfunding platform good value for money? Would it be more efficient to raise funds through a charity affiliated with St.George’s?
4.6. Are there other funders as many do not allow overlap between the projects they fund and any funding source. You must to ensure your project is outside the scope of other funded research.
4.7. Are there any conflicts of interest? You cannot have a personal financial interest in the crowdfunding vehicle or in the results of the crowdfunding. The Trust or University conflicts of interest policy, whichever is your substantive employer must be adhered to.
4.8. If your project involves more than one higher education Institution, have the policies and procedures of all Institutions been followed or where this is not feasible has it been settled which policies and procedures apply?
4.9. Have you obtained peer review for quality control according to the sop 0021?
4.10. Is the project capable of being adopted onto the NIHR portfolio to access NIHR CRN resources?
4.11. Have you budgeted correctly bearing in mind that the project will most likely not be eligible for HEFCE QR funding and taking account of all NHS costs including any fees etc. that may fall due?
4.12. Is your project configured into discrete work packages to account for potential funding shortfall or over-subscription?
APPENDIX
FINANCIAL PROCESS AND CONTROLS FOR CROWDFUNDING
The following financial procedure is to be followed in all cases of projects funded through a crowdfunding source and is to be read in conjunction with St George’s Crowdfunding Policy, approved by the Research Strategy Committee, 15th March, 2017.
From the outset, we advise the crowdfunding funder the amount we need in order to carry out the project and we will negotiate their terms for providing the funds. (This will usually be a single funder who will collect the large number of small contributions on our behalf before sending us the amount required for the project. We will not become involved in collecting a large number of small amounts directly.)
Once the first crowdfunded project reaches its funding target, we will set up a single project code that will be used for all future (separate) crowdfunded projects. Under the project code a new sub-project code will be established for each crowdfunding source once each crowdfunder has confirmed that the funding target has been achieved The subproject code is to be advised to the funder so they can refer to it when sending us the full amount of the required funding. We will not accept monies that fall short of the total amount required for the project. Only when the funder has received all the necessary contributions from its investors, will they send us the full amount required for the project.
The Treasury Accountant should be notified of the amount expected and the subproject code to which it should be allocated in case the funder does not quote the subproject code. The full amount received will be journaled from our bank account into the sub-project code, to be available for use in the project.
Following this the project will be managed as any other research project.