Regulating fundraising for the future

It has been a difficult summer for charities. Negative media coverage has been to the detriment of us all. The stories picked up on failings in a relatively small number of charities, but tapped into a much wider, much stronger, public concern about how charities ask for money. Criticism has rained in from all sides and I think many would agree that this cannot and should not continue.

This summer, I chaired a cross party review of fundraising regulation for the Minister for Civil Society. During the course of our review we have heard many voices and read many concerns, whether for the donors that give or for the future of the charities whom we hold so dear. I believe that we have been given clear signals as to the future direction of fundraising and the checks and balances that should remain in place around it.

Download the report Regulating fundraising for the future: Trust in charities, confidence in fundraising regulation (PDF, 630kb).

Trustees are key

First, and most importantly, we have heard that trustees must know what fundraising activities are taking place in their name. The crisis of trust we face is not simply a fundraising issue, it is a governance issue. Our review has therefore concluded that trustees need a clearer view and a stronger hand on the fundraising tiller.

A new regulator

Secondly, charities and other fundraising organisations need a new, more visible and effective fundraising regulator. The public have to know where to report their concerns. We are appreciative of the work that the Fundraising Standards Board has done, but we believe that the confidence of the public requires a new approach.

We have concluded that a new regulator with stronger powers to sanction, universal coverage and better resources is a necessity. This includes the establishment of a new Fundraising Preference Service so that the public can easily stop unwanted fundraising communication from charities.

Clear roles and responsibilities

We have also concluded that the Institute of Fundraising should hand over responsibility for setting the rules which govern fundraising – the Code of Practice – to the new regulator.

One of the most important issues to emerge from our review is that the public interest overrides any professional interest. Nothing less than handing over responsibility to the new regulator for setting the rules will do.

Fundraising regulation at present is unnecessarily complex – too many bodies with competing interests. We have recommended that the Public Fundraising Regulatory Association should merge with the Institute of Fundraising, but that its regulatory responsibilities should move to the new fundraising regulator. Better regulation requires a clear separation of roles and interests.

We heard a clear message from charities and the government that there is little appetite for state regulation and all that this entails. If we are to maintain the trust of the public we must be able to show that we can regulate ourselves.

Nevertheless, some breaches of the rules on fundraising may raise concerns that there has been a breach of trustee duties. In such cases, the Charity Commission can and should investigate. And we believe that reporting to parliament – not the government – provides for both accountability and independence.

I am cautious of statements that this review, and other activities in the fundraising world, represent a turning point or the crossing of a Rubicon. They do, I hope, represent the start of a long, hard journey to rebuild public confidence in fundraising regulation and trust in charities.

 

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14 Responses to Regulating fundraising for the future

  1. I am the Treasurer of a small charity in Cornwall. This whole industry’s fund raising really needs cleaning up. Larger charities can afford to employ chuggers, call centres and agencies to do their fund raising with but seemingly offer no management at all. Smaller charities cannot afford such luxuries yet all charities are tarred with the same brush when things go wrong and the smaller will therefore suffer more than the larger amongst us. A stronger regulatory body for both charities generally ands for fund raising in particular is urgently needed.

  2. Big thank you to Sir Stuart. There is a feeling that this recaptures the initiative for the sector itself, because it achieves a realistic recognition of the public interest as well as the sector’s interest – and of the fact that these are not always the same. I shall read the detail with interest, but the outlines will inspire the right level of confidence among different stakeholders in this debate. Congratulations: good leadership.

  3. Diana says:

    congratulations on a fair, balanced report and recommendations. Emphasis on the responsibilities of trustees is timely in the sector more generally.

  4. Adrian Beney says:

    Probably a welcome review. But I have serious concerns about the almost total silence in the consultation from the Higher Education, Secondary Education and Arts Sectors. One could blame those sectors for not taking part, but one could also ask the authors the extent to which they sought out views from the whole of the not for profit sector, since presumably they will be subject to the same regulatory regime. To this one should add the thousands of academy schools whose charity regulator is the Secretary of State for Education.

    • Karl Wilding Karl Wilding says:

      Adrian, the Review was very clear that fundraising regulation applies to fundraising organisations, not just fundraising charities. The report highlights at the beginning that schools, hospitals and universities will likely increase their volume of fundraising, so the need to get this right is more important than ever.

      In a relatively short time, the Review team sought to speak to as many constituencies as possible. We didn’t cover every one or everything: I would hope that this can be addressed in the consultation that will be necessary as the Review moves to implementation.

      As an aside, it was argued to us that higher education, via CASE, already have guidance that trustees in particular might learn from, here: http://www.case.org/Samples_Research_and_Tools/Ethics_Resources_and_Issues/Perspectives_on_Ethical_Decision-Making_in_Fundraising.html

  5. Julian Macro says:

    I help with door-to-door collections in Christian Aid Week and get a good response from most people: no pressure just a request, and, of course, no commission etc for me, just the satisfaction of promoting an excellent charity. It would be a great pity if this kind of work was prevented.

  6. Adrian Sargeant says:

    Does the sector need a stronger regulator – undoubtedly – some of us have been calling for that since the FRSB was first founded.

    But the notion of a fundraising preference service is utterly crass. Are we really now going to be living in a country where some of our most vulnerable groups will lose the right to have someone ask for help on their behalf?

    Certainly donors have rights – a key one being the right to say no and not to feel guilty when they do. And the sector certainly has much to do to regain the public’s trust in this regard.

    But fundamentally, vulnerable groups must also have the corresponding right to ask.

    Imagine if some terrible disaster unfolds – and you cant communicate with 10% of the population to ask them to express their love and support for those affected. Be in no doubt – people would die as a consequence.

    All fundraising communications should be a balance and a balance of late that has skewed too far in the direction of the beneficiary with technique being used to pressurize people into supporting causes they cared little about. There is no doubt that that needs to change – but removing the right to ask for help in key channels is fundamentally wrong. Everyone in desperate need – in a caring and civilized society – should fundamentally have the right to have their voice heard and to be able to ask for help when it is needed

    Its a great shame that such a negative and ill-conceived proposal made it into the final cut of an otherwise very welcome and necessary report.

    • Stephen Moreton says:

      Surely, if some terrible disaster unfolds – you can still communicate with the 10% of the population registered on the FPS to ask them to express their love and support for those affected, but just not by telephone…?

      • Adrian Sargeant says:

        Or any other ‘direct response’ channel – and that’s the issue. You could advertise on TV – but how many charities have that kind of budget? And the media that would be left all share one characteristic – that is that they are high cost and frequently planned months ahead.

        I live for the day when we might have a financial service preference service, or an insurance preference service. Why pick on a sector trying to do its best by some of the most vulnerable in our society? Its crass – and if adopted could cost the sector millions a year in donations from folks who actually, if you asked them respectfully, would have been genuinely happy to give.

        • Terry Squire says:

          Hi Adrian
          I receive a lot of junk mail through the post and most of it hits the recycling bin without being read. However on average I receive about 1 letter a week from a charity asking for support. I do not understand how some people can be receiving over 200 requests a month, maybe I’m just lucky. However if this is the case then obviously some sort of action needs to be taken but I feel what is what has been proposed is a bit of a sledgehammer to crack a nut. I agree wholeheatedly with you, anything that restricts charities ability to contact the public has to be balanced and measured to ensure that vulnerable people continue to be supported when there is no statutory agencies have abandoned them. If anybody can let me know how to stop any non charitable junk mail being delivered, please let me know!!

  7. Mark Freeman says:

    I have said this before, this is not a crisis for, or of the making of, small charities; this is an issue big charities have created. It is essential that any fallout does not impact on the work of small charities; will they have to find the extra cost of interrogating a preference service? Will they have their potential donor base reduced?
    The growing inequality in society seems to be mirrored in the charity world. I agree that the poor practise exhibited by the small number of large charities needs to be addressed and there are elements in the proposals that will do this. I am less sure that a preference service that most people will never understand and will duplicate what exists (to some point) is going to help, and may well confuse people.
    If we are going to rebuild trust shouldn’t we be saying that the use of third party fundraisers who have no connection or belief in a charity should be banned? Should we be banning the effective but loathed chuggers, committed volunteers that shake tins may raise less but they are something that the public supports and respects. Should we be regulating the pictures and the text used in funding campaigns?
    I do wonder if this solution will continue to allow the bad practice, will do little to really change public opinion, and will continue to grow the divide between the big organisations (to whom this report has tried to appease) and the vast majority of smaller charities.

  8. Richard Hogg says:

    Example why Fundraising Preference Service is going to restrict fundraising.

    We received a letter from a potential supporter to a recent campaign explaining why she would not be donating. The letter was somewhat rambling and attracted the attention of our Supporter Care. Included with the letter were two children’s books that were written, illustrated and professionally printed by the lady. The stories were basically thoughts falling onto the page and made very little sense… even being very generous from a critics point of view!

    The books were in aid of two other charities. A quick Google search later and the lady in question had written the books based on a fundraising event she had undertaken in her garden – and that she is well known to one of the charities and is on their website as having supported that organisation for over 25 years.

    We take supporter care seriously and would flag this person as no contact on grounds of vulnerability and advise the list broker if from a cold list.

    If we did this using the proposed FPS then 25 years of contact would come to an end with the other charity.

    In practice it clearly wouldn’t but how would you enforce such a regulation?

    If you don’t want to hear from a charity, tell them directly. Sign up to the MPS and TPS and complain if you hear from organisations you do not support. We actively promote both these services to any complaints received.

    Why are we not being more up front about these existing methods of limiting communications?

    What is actually needed is an organisational stop file that is tailored to each charity. Supporter informs central body that they do not want to hear from X, Y and Z charity, central body informs said organisations – who add to their stop list – and then regulated if communications continue.

    But then again this would not stop Door Drops – how would that be enforced?

    Or indeed errors in data processing – are we going to stop a charity from fundraising because of a typo in an address field?

    But if you must give us FPS then can I please have a PPIPS

  9. mike barnato says:

    There’s a fundamental issue about the role and responsibilities of directors, trustees and governance here. It goes much wider than just fund raising practices.

    • Richard Hogg says:

      Agreed – so why try to over-burden fundraising practice at all then with something that won’t work effectively and potentially limit on-going relationships between charities and their supporters?